help in homework

New User?

Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Color Mate Inc

Color Mate Inc

Marketing

Color Mate Inc., a company that produces interior and wall paints, dumps its chemical waste in a river. Which of the following is likely to be true in this case?

a. The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

b. The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

c. The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

d. The social cost of the company is lower than the private cost, and the equilibrium quantity of paints produced is less than the social optimum.

pur-new-sol

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Answer Preview

  • The correct option is b. The social cost of the company is higher than the private cost, and the equilibrium quantity of paints produced is larger than the social optimum.

Here, Color Mate Inc. is involved in dumping their chemical wastes in the river where the river is an open resource and they don't have to pay for the river pollution. Thus, in this case, Color Mate Inc. will produce their product more than the socially optimal level that makes the social cost to be higher than the private cost.

Sitejabber (5.0)

BBC (5.0)

Trustpilot (4.9)

Google (5.0)