Figure 5-3 -Refer to Figure 5-3.The Size of Marginal External Benefits Can

question 203

Multiple Choice

Figure 5-3
-Refer to Figure 5-3.The size of marginal external benefits can be determined by

• A)the demand curve D2.
• B)D2 + D1 at each output level
• C)D2 - D1 at each output level.
• D)the demand curve D1.

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Definitions:

Midpoint Formula

A method used to calculate the elasticity of demand or supply by averaging the start and end points of a range.

Price Elasticity

A gauge for the sensitivity of the amount of a good that is demanded or offered to alterations in its pricing.

Quantity Supplied

The amount of a particular product that a firm would be willing and able to offer for sale at a particular price during a given time period.

Elasticity of Labor Supply

A measure of the response of labor supplied to a change in the price of labor.