(Figure: Market with External Cost) Suppose That the Figuredisplays the Demand

question 117

Multiple Choice

(Figure: Market with External Cost) Suppose that the figuredisplays the demand and supply curves for dry cleaning, aservice that creates pollution. The external cost of dry cleaningis:

• A)P₂.
• B)P₁ - P0.
• C)P0.
• D)P₂ - P0.

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