Econ 4th Edition by William McEachern

Exercise 5

(External Costs) Use the data in the table below to answer the following questions.
a. What is the marginal external cost of production?
b. What level is produced if there is no regulation of the externality?
c. What level should be produced to achieve economic efficiency?
d. Calculate the dollar value of the net gain to society from correcting the externality.