Suppose There Are Several Paper Mills Producing Paper for a Market.These

question 178

Multiple Choice

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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