-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:

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.

Net Income

The net income of a business once all costs, taxes, and expenses are deducted from its total revenue.

Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits.

Treasury Stock

Shares that were once part of the outstanding shares of a company but were later reacquired and are held in the company’s treasury.