Multiple Choice
The figure shows the unregulated market for a pesticide, where S is the supply curve and D is the demand curve. The demand curve is the same as the MSB curve. When factories produce the pesticide, they also create waste, which they dump into a lake on the outskirts of the town. The marginal external cost of the dumped waste is equal to the marginal private cost of producing the pesticide.
-In the figure above, if no one owns the lake, what is the quantity of pesticide produced?
A) 300 tons per month
B) 240 tons per month
C) 180 tons per month
D) 360 tons per month
Correct Answer:

Verified
Correct Answer:
Verified
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