Question

below is a graph that illustrates the social costs of producing refrigerators. as a by - product of the metals, plastics, chemicals, and energy that refrigerator manufacturers use, some pollution is created. these pollutants create costs of $100 per refrigerator produced.
if a firm takes only its own costs of production into account, the firm will need to receive a price of ____ per refrigerator and produce a quantity of ____ in order to achieve market equilibrium.
select the correct answer below:
$650; 45,000
$700; 40,000
$600; 30,000
$800; 50,000

Explanation:

Step1: Understand the concepts

When a firm takes only its own costs (private costs) into account, it will produce at the equilibrium where the private - supply curve (\(S_{private}\)) intersects the demand curve (\(D\)).

Step2: Identify the intersection point

Looking at the graph, the intersection of the private - supply curve (\(S_{private}\)) and the demand curve (\(D\)) is at the point \(E_{0}=(45000,650)\)

Answer:

A. \(\$650;45,000\)