-The Table Above Gives the Private Costs and External Costs

question 374

Essay

-The table above gives the private costs and external costs of producing paper.
a) Complete the table by finding the marginal social cost at each level of production.
b) If the market is competitive and is left unregulated and 400 tons of paper are produced, what is the price of a ton of paper?
c) If the government imposes a tax equal to the external cost at each level of production, what price would be charged if 400 tons are produced?

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Definitions:

Net Present Value

The distinction in present monetary value between incoming and outgoing cash over a designated interval.

Investment Opportunities

Potential prospects or ventures that could yield financial returns or profits for investors.

Cash Savings

Funds that are kept on hand or in a bank account and are readily available for use in emergencies or for future purchases.

Simple Rate of Return

The percentage of annual incremental net operating income to the initial investment cost.