Supply Demand QUANTITY For an output level exactly at QE, the value of a unit to a buyer is the cost of a unit to a seller. Suppose a firm that produces for this market is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the health of nearby residents who have no business with the company. This scenario is characterized by , which is an example of PRICE

Supply Demand QUANTITY For an output level exactly at QE, the value of a unit to a buyer is the cost of a unit to a seller. Suppose a firm that produces for this market is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the health of nearby residents who have no business with the company. This scenario is characterized by , which is an example of PRICE

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter6: Demand Relationships Among Goods

Section: Chapter Questions

Problem 6.4P

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9. Market efficiency and market failure

Suppose that the following graph shows a free market equilibrium, with QEQE as the equilibrium quantity.

Supply
Demand
QUANTITY
For an output level exactly at QE, the value of a unit to a buyer is
the cost of a unit to a seller.
Suppose a firm that produces for this market is able to dump toxic chemicals into a river next to its factory, which poisons wildlife and harms the
health of nearby residents who have no business with the company. This scenario is characterized by
, which is an example of
PRICE

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