Figure 10-2
-Refer to Figure 10-2. If all external costs were internalized, then the market's output would be

Question

Figure 10-2 -Refer to Figure 10-2. If all external costs were internalized, then the market's output would be A)Q₁. B)Q₂. C)Q₃. D)Q₄.

Quizplus · Accepted Answer

When external costs are internalized, the market output aligns with the socially optimal output level, which is typically less than the unregulated market output. This is often represented by Q₂ in economic diagrams where externalities are considered.

Figure 10-2 -Refer to Figure 10-2. If All External Costs Were Internalized