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Author Question: The diagram below shows the private and social marginal costs (MCPandMCS) and the social marginal ... (Read 146 times)

kckanistras

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The diagram below shows the private and social marginal costs (MCP and MCS) and the social marginal benefits (MBS) of producing disposable diapers.



FIGURE 17-2

Refer to Figure 17-2. The allocatively efficient level of production and use of disposable diapers is


◦ Q1, because that is where MCS equals MBS.
◦ Q0, because that is where MCS equals MBS.
◦ Q0, because that is where MCS exceeds MCP.
◦ Q2, because that is where the externality is internalized.
◦ Q1, because that is where MCP equals MBS.


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Marked as best answer by kckanistras on Oct 12, 2022

FireandIce

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kckanistras

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Reply 2 on: Oct 12, 2022
Excellent


ghepp

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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