Use Figure: Negative Externality and Deadweight Loss I

Multiple Choice

Use Figure: Negative Externality and Deadweight Loss I. The figure shows the marginal benefit, marginal private cost, and marginal social cost that are associated with producing a good. Based on the graph, producing the good involves a marginal external cost of:
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Figure: Negative Externality and Deadweight Loss I

A) $2.
B) $3.
C) $4.
D) $5.