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Use the Following to Answer Questions

Question 10

Multiple Choice

Use the following to answer questions:
Figure: Market with External Cost Use the following to answer questions: Figure: Market with External Cost -(Figure: Market with External Cost) Suppose the figure displays the demand and supply curves for dry cleaning, a service that creates pollution. The external cost of dry cleaning is: A) P<sub>2</sub>. B) P<sub>1</sub> - P<sub>0</sub>. C) P<sub>0</sub>. D) P<sub>2</sub> - P<sub>0</sub>.
-(Figure: Market with External Cost) Suppose the figure displays the demand and supply curves for dry cleaning, a service that creates pollution. The external cost of dry cleaning is:


A) P2.
B) P1 - P0.
C) P0.
D) P2 - P0.

Correct Answer:

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