Consider a Competitive Market with a MPB = 22 -

question 6

Multiple Choice

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market.Which statement is true?

• A)The efficient level of output is 4 units.
• B)The efficient level of output is 6 units.
• C)The efficient level of output is 8 units.
• D)The efficient level of output is 12 units.
• E)The efficient level of output is 0 units.

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