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In the figure above D is a demand curve for good Q, MPC is the...

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Finance

In the figure above D is a demand curve for good Q, MPC is the private marginal cost, MEC the marginal external cost, and MSC the marginal social cost.

a.Explain why MSC is different from MPC.

image

MSC=MPC+MEC MPC P2 P1 9 D Q2

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