Three Hundred Paper Mills Compete in the Paper Market

Multiple Choice

Three hundred paper mills compete in the paper market.The total cost of production (in dollars) for each mill is given by the formula TC = 1,000Q_mill + (Q_mill) ²,where Q_mill indicates the mills annual production in thousands of tons.The marginal external cost of a mill's production (in dollars) is given by the formula MEC = 200 + 2Q_mill.Finally,annual market demand (in thousands of tons) is given by the formula Q^d = 200,000 - 100P.Which of the following gives the function for the marginal social cost?

A) MSC = 1,200 - 4Q
B) MSC = 800 + 4Q
C) MSC = 1,200 + 4Q
D) MSC = 800 - 4Q