Question:
How can Overproduction come due to Ignoring Negative Production Externalities?
Author: eric_galvaoAnswer:
-Simplistic Sake, MPB = MSB. But MSC and MPC are Different Lines, so have their Own Intersections with MPB [MSB too] -This creates their own Quantity at the Given Price Level -Negative Production Externalities will have the MSC Higher than the MPC, so therefore, MSC will have a Lower Quantity than MPC -Therefore, an Overproduction of MPC Quantity X = MSC Quantity Y will Occur. [And at Lower Price too]
0 / 5 Â (0 ratings)
1 answer(s) in total