Question

The production of paper often creates a waste product that pollutes waterways. Assume the producer of paper does not directly pay to dispose of the waste in the water.In this case, the price of paper will be ___________(above/below) the socially efficient price and the amount of paper produced will be __________(above/below) the socially efficient amount.

Answer 1

1. BELOW
2. ABOVE

Step-by-step explanation:

• In this situation, he decides to save some sum from the cost of production and the price of paper will be cheaper than the socially efficient level

• If he spends his saved money in manufacturing the amount of paper generated will be greater than the socially efficient value as he generates more paper.

Therefore, the above answer is correct according to his management skills.