Figure 154 Suppose There Are Several Paper Mills Producing Paper

Multiple Choice

Figure 15.4 Suppose there are several paper mills producing paper for a market.These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river.The waste material affects the number of fish in the river, and the use of the river for recreation and as a public water supply source.Figure 15.4 shows the paper market.Use this Figure to answer the following question(s) .
-Refer to Figure 15.4.Why is there a deadweight loss?

A) Because the marginal social cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
B) Because the marginal private cost of producing each additional unit in excess of Q₂ exceeds the marginal benefit
C) Because the marginal social benefit of producing each additional unit in excess of Q₂ exceeds the private cost
D) Because the marginal private benefit of producing each additional unit in excess of Q₂ exceeds the social cost