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The External Marginal Cost of Producing Coal Is MCexternal =

Question 10

Multiple Choice

The external marginal cost of producing coal is MCexternal = 8Q while the internal marginal cost is MC internal = 6Q.The inverse demand for coal is given by P = 180 − 4Q.What is the socially efficient level of output?


A) 10
B) 20
C) 15
D) 18

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