Figure 15.4 Suppose there are several paper mills producing paper for a market.These mills, located upstream from a fishing village, discharge a large amount of wastewater into the river.The waste material affects the number of fish in the river, and the use of the river for recreation and as a public water supply source.Figure 15.4 shows the paper market.Use this Figure to answer the following question(s). -Refer to Figure 15.4.What does S₁represent? A)The market supply curve that reflects social cost B)The market supply curve that reflects only external cost C)The market supply curve that reflects only private benefit D)The market supply curve that reflects private cost

Question

Quizplus · Accepted Answer

The notation S₁ typically represents the market supply curve that reflects private cost. This is because supply curves in economic models often represent the costs to producers, with private costs being those directly borne by the entity that is producing the goods or services.

Figure 154 Suppose There Are Several Paper Mills Producing Paper