Exhibit 30-1 ​ Refer to Exhibit 30-1. If the Exhibit Represents a Negative

question 137

Multiple Choice

Exhibit 30-1 ​

Refer to Exhibit 30-1. If the exhibit represents a negative externality situation, then what is Q₁?

• A)It is the quantity of output at which marginal social costs (MS
• C)equal marginal private costs (MP
• C).
• B)It is the quantity of output at which MPC > MSC.
• C)It is the market output; it is the quantity of output that exists if the external costs associated with the negative externality are not taken into account.
• D)It is the socially optimal output; it is the quantity of output that exists if the external costs associated with the negative externality are taken into account.

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