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A Negative Externality Problem

Question 55

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A Negative Externality Problem

Demand for a good is given by Q = 100 - P. The private marginal cost of production is MCP = 10 + Q. There is a $10 per unit negative production externality in this situation.


-Refer to A Negative Externality Problem.The equation for social marginal cost is


A) MCS = 10 + Q
B) MCS = Q
C) MCS = 20 + Q
D) MCS = 10 + 10Q

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