Figure 5-4 Suppose There Are Several Paper Mills Producing Paper for a Mills

question 233

Multiple Choice

Figure 5-4

Suppose there are several paper mills producing paper for a market. These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river. The waste material affects the number of fish in the river and the use of the river for recreation and as a public water supply source. Figure 5-4 shows the paper market. Use this Figure to answer the following question(s) .
-Refer to Figure 5-4.What does S₁ represent?

• A)the market supply curve that reflects social cost
• B)the market supply curve that reflects only external cost
• C)the market supply curve that reflects only private benefit
• D)the market supply curve that reflects private cost

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