An Environmental Economic Consulting Firm Is Hired to Measure the Negative

question 1

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 MSC = 2Q+30 and the marginal private cost of production to be $M P C = Q$ +30. The market demand curve for the industry can be expressed as P = 60-Q. What is the socially optimal level of output?

• A) 20 units.
• B) 15 units.
• C) 10 units.
• D) 6 units.

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Definitions:

Seasonal Revenues

Income generated by a business that varies depending on the time of year, often due to consumer demand patterns.

Capital Leases

A capital lease is a lease considered to have the economic characteristics of asset ownership for accounting purposes.

Changes in Accounting Principles

Adjustments made to the accounting methodology used by a company, which could significantly affect the financial statements.

Inventory Loss

A decrease in the quantity or value of inventory due to factors like theft, spoilage, or obsolescence.