all of the solutions to externality problems involve: setting regulations that impose the socially optimal price and quantity in the market. converting social costs into private costs. getting buyers and sellers to consider marginal external costs and benefits. turning private costs and benefits into external costs and benefits.

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25-10-2022
Business

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all of the solutions to externality problems involve: setting regulations that impose the socially optimal price and quantity in the market. converting social costs into private costs. getting buyers and sellers to consider marginal external costs and benefits. turning private costs and benefits into external costs and benefits.

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rafikiedu02 rafikiedu02 · Answer 1 · 2022-11-03T12:01:25-04:00

All of the solutions to externality problems involve getting buyers and sellers to consider marginal external costs and benefits.

Marginal external cost (MEC) is the change in costs to parties other than the producer or purchaser of goods or services due to the production of additional units of goods or services.

Marginal external cost is the cost incurred by a person other than the producer to produce one additional unit of a good or service. We get this marginal external cost = (1/12)Q. A skier's marginal social cost (MSC) is equal to the sum of marginal private cost and marginal external cost: MSC = marginal private cost + marginal external cost = (1/6)Q + (1/12)Q = ( 1/4) F.

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