An Environmental Economic Consulting Firm Is Hired to Measure the Negative

question 52

Multiple Choice

An environmental economic consulting firm is hired to measure the negative externalities associated with the pollution from an industry. The consultants calculate the marginal social cost of production to be $M S C = 2 Q + 30$ and the marginal private cost of production to be $M P C = Q$ $+ 30$ . The market demand curve can be expressed as $P = 60 - Q$ . If the consultants have accurately measured the impact of the pollution externality, the deadweight loss from producing at the market equilibrium is:

• A) \(\$ 30\)
• B) \(\$ 37.5\).
• C) \(\$ 55\).
• D) \(\$ 67.5\).

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