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A-Level Economics · Negative consumption externality diagram question

Which distance shows the MARGINAL EXTERNAL COST of the last unit the market consumes?

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The diagram

The answer

The distance E G. MPB minus MSB at Q=5: the smoker's last cigarette gives £4 less benefit to society than to the smoker — that's the harm to others. MEC of consumption = the VERTICAL gap between MPB and MSB at the quantity in question. At market quantity that's E down to G: £4 of harm to bystanders.

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This is one of 5 questions on the negative consumption externality diagram — every corner lettered, every wrong answer diagnosed.

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