The graph illustrates the unregulated market for pesticide W

The graph illustrates the unregulated market for pesticide. When the factories produce pesticide, they also create waste which they dump in to a lake on the outskits of a small town.

Solution

Solution:

The quantity of pesticide produced is the efficient quantity, 150 tons a week.

The townspeople charge the factories $100 a ton of pesticide, which is the marginal external cost of the pollution produced by150 tons a week.