Market Failure, Externalities, and Government Intervention
Question 1 of 5
Time left: 00:00
Free Maths Q & A Practice 1 of 5 free exam-style exercises in this topic

Evidence for analysis

Negative production externalityQuantityCost / benefitMarginal external cost = ?MPCMSCMSB
EvidenceValue
MSC$70
MPC$45
MSB$60
External costMSC - MPC

MSC, MPC and MSB at the market output are $70, $45 and $60. What per-unit corrective tax aligns private and social cost?

Select one option.
You have used 0 of 1 attempt
Next ▶