Question

Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer. Under these circumstances,

output benefit cost cost
0 80 0 20
1 70 10 30
2 60 20 40
3 50 30 50
4 40 40 60
5 30 50 60
6 20 60 80
A) there are positive externalities in this market.
B) there are negative externalities in this market, equal to $10 per unit.
C) there are no externalities in this market.
D) not enough information is provided to determine whether or not there are externalities.
E) there are negative externalities in this market, equal to $20 per unit."

Answer 1

The table provided suggests the presence of negative externalities in the market, but the specific value of the externalities is not given.

Step-by-step explanation:

The table provided includes information on marginal private cost, marginal social cost, and marginal social benefit in the production and consumption of chemical fertilizer.

By comparing the marginal social cost and marginal private cost, we can determine the presence of externalities.

In this case, the marginal social cost is higher than the marginal private cost, indicating the presence of negative externalities in the market.

However, the extent of the externalities is not provided, so we cannot determine the exact value.

Therefore, the correct answer is D) not enough information is provided to determine whether or not there are externalities.