Higher Social Cost of Banana Production due to Negative Externality
In the Weevokil banana production model, the marginal social cost (MSC) is greater than the marginal private cost (MPC). This discrepancy arises because the production process generates a negative externality—pollution from the Weevokil pesticide—which imposes a marginal external cost (MEC) on local fishermen. The MSC is inclusive of this external cost, whereas the MPC is not.
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The Economy 2.0 Microeconomics @ CORE Econ
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Introduction to Microeconomics Course
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Graphical Representation of the Marginal Private Cost in the Weevokil Model (Figure 10.1)
Higher Social Cost of Banana Production due to Negative Externality
Comparison of Marginal Private Cost (MPC) and Marginal Social Cost (MSC)
Higher Social Cost of Banana Production due to Negative Externality
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