Figure 10-19
-Refer to Figure 10-19. Each additional unit of the good that is produced yields an external benefit of
A)$15.
B)$23.
C)$36.
D)$89.

Question

Figure 10-19 
-Refer to Figure 10-19. Each additional unit of the good that is produced yields an external benefit of
A)$15. 
B)$23. 
C)$36. 
D)$89.

Quizplus · Accepted Answer

The external benefit of each additional unit produced is shown by the vertical distance between the social benefit curve and the private benefit curve. At producing Q=5 units, the external benefit is $36 ($64-$28). This is the optimal level of production that maximizes social welfare.

Figure 10-19 -Refer to Figure 10-19. Each Additional Unit of the Good