Refer to the Figure Below

question 17

Multiple Choice

Refer to the figure below. From this graph, you can infer that paper production:

• A)generates no externalities at quantities less than 300 tons per day.
• B)generates an external cost of $50 per ton per year.
• C)generates an external cost of $150 per ton per year.
• D)should be prohibited.

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Definitions:

Wholesale Price

The cost of goods sold in bulk to retailers or distributors, generally lower than retail price.

Seal

A device or symbol used to authenticate documents as genuine or to signify approval or ratification.

Consideration

A concept in contract law, referring to something of value exchanged between parties as part of an agreement.

Gratuitous Promise

A voluntary promise or agreement without consideration, where the promisor is not legally bound to fulfill the promise.