A quarry is deciding whether to extract and sell an additional 100 tonnes of stone. Table 1 shows the estimated costs and benefits.
| Item | Value |
|---|---|
| Private benefit to the quarry from revenue | £4,600 |
| Private cost to the quarry | £4,200 |
| Cost of dust and noise imposed on nearby households | £900 |
There are no other external costs or benefits.
Explain whether the additional 100 tonnes are likely to be produced by the market and whether producing them would be efficient for society. Use the data in Table 1 in your answer.
83 exam-style questions on AQA GCSE Economics 1.6 Market failure, covering 1.6.1a Market failure as misallocation of resources, 1.6.1b Government intervention, 1.6.2a Defining externalities, and 1.6.2b Positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.