Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics.
-Refer to Figure 10-13. If 250 units of plastics are produced and consumed, then the
A)social optimum has been reached.
B)market equilibrium has been reached.
C)negative externality associated with plastics has been eliminated.
D)positive externality associated with plastics has been eliminated.

Question

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics. 
-Refer to Figure 10-13. If 250 units of plastics are produced and consumed, then the
A)social optimum has been reached. 
B)market equilibrium has been reached. 
C)negative externality associated with plastics has been eliminated. 
D)positive externality associated with plastics has been eliminated.

Quizplus · Accepted Answer

The social optimum has been reached because the marginal social cost (MSC) is equal to the marginal social benefit (MSB) at the quantity of 250 units.