Figure 5-2 Figure 5-2 shows a market with a negative externality. -Refer to Figure 5-2. The size of marginal external costs can be determined by A) S₂ + S₁at each output level. B) S₂- S₁at each output level. C) the supply curve S₂. D) the supply curve S₁.

Question

Quizplus · Accepted Answer

The marginal external cost is the difference between the social cost (S2) and the private cost (S1) at each output level.

Figure 5-2 Figure 5-2 Shows a Market with a Negative