Question

D Question 48 1 pts $ per unit social MC Private MC $50 $47 b . a $40 $25 e C $15 f private MB 0 # of units 10 20 Use the graph above. The amount of external damage done per unit produced is o $10 o $15 o $25 O $40 O $47 Next

Answer 1

$10

(External damage done per unit of output produced is called marginal external damage. Marginal external damage is given by the vertical distance between marginal social cost curve and private social cost curve.

Marginal external damage = the vertical distance between d and a in the digram.

Price corresponding to d = 50 $

Price corresponding to a = 40 $.

The difference vertical distance between d and a measured in terms of dollar

= 50 - 40 = 10 $ )