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.
in order to achieve market equilibrium after taking the additional external costs of pollution into account, the new equilibrium would be at a price of ____ per refrigerator and a quantity of ____.
select the correct answer below:
$700; 40,000
$650; 45,000
$600, 40,000
$750, 45,000

Explanation:

Step1: Identify the equilibrium point

In a market - equilibrium graph, the equilibrium occurs at the intersection of the demand curve (D) and the supply curve. When considering social costs (external costs of pollution), we look at the intersection of the demand curve (D) and the social - cost supply curve (\(S_{social}\)).

Step2: Read the values from the graph

From the graph, the intersection of the demand curve (D) and the social - cost supply curve (\(S_{social}\)) is at the point \((40000,700)\)

Answer:

\(\$700; 40,000\)