Answer to Question #146493 in Macroeconomics for Rinae

Question

Draw a graph that represent a production activity of a coal mine in Mpumalanga,and where the air pollution is analysed in the form of coal dust.use hypothetical figures to explain

Answer 1

The production activity of a coal mine in Mpumalanga can be shown as a point of marginal private cost (MPC) and marginal social benefit (MSB) curves intersection. The optimal production will be lower at higher price in point, where MSB = MSC (marginal social cost).