Unformatted text preview: e demand for paper is Q = 15− P/2 , where P is measured in $ per ream and Q is
measured in reams. It costs $6 to produce each ream of paper (what is the marginal cost
equation?). Producing paper also generates water pollution externalities due to the chemical
processing. The cost of the pollution is as follows: The first ream causes $1 damage and each
additional ream imposes $1 more pollution costs than the previous ream.
A) Plot the MB, MC, and SMC. Label the axes, intercepts and the lines you add. 21...
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