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nyounger nyounger
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5 years ago

Figure 5-4



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 5-4 shows the paper market. Use this Figure to answer the following question(s).



Refer to Figure 5-4. Why is there a deadweight loss?



▸

because the marginal social benefit of producing each additional unit in excess of Q2 exceeds the private cost



▸

because the marginal social cost of producing each additional unit in excess of Q2 exceeds the marginal benefit



▸

because the marginal private cost of producing each additional unit in excess of Q2 exceeds the marginal benefit



▸

because the marginal private benefit of producing each additional unit in excess of Q2 exceeds the social cost

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InMicro

InMicro


Edition: 1st
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vande746vande746
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nyounger Author
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5 years ago
Thanks
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Helped a lot
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Just got PERFECT on my quiz
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