Suppose you are a public official responsible for setting a retail disposal charge on antifreeze. Estimated marginal benefit and cost functions for antifreeze are as follows:
MPB = 10.0 – 0.5Q MPC = MSC = 1.0 + 0.4Q
MSB = 10.0 – 1.1Q,
Where MPB, MSB, and MPC are measured in dollars per gallon, and Q is in millions of gallons.
a). Identify the Marginal External Benefit (MEB) function, and briefly explain what this function is measuring.
