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Word Count: 790
The article Somethings Rising talks about the negative effects of coal mining Coal is a fuel that is primarily used for electricity and heat across the world The market for coal in general is a standard supply and demand curve as seen in Graph 1 attached The market equilibrium maximizes consumer surplus plus producer surplus The market for coal is elastic because although the need for coal is strong there are substitutes like gas burning oil and kerosene that can be used However this is inefficient because it excludes the social costsThe market for the coal workers is different from the market for coal in general because it includes the social cost on the workers as seen in Graph 2 attached In this graph there is a shift in the supply curve because of the added external costs on society Therefore the supply plus the external costs social costs shift the curve up and to the left Because of this shift there is a change in the equilibrium With the graph for the market of coal in general it did not include the social costs so it was inefficient however with the social costs included in the market for coal workers it is efficient The shift in the supply curve creates an efficient equilibrium price and efficient equilibrium quantity All of this can be seen on Graph 2 The equilibrium maximizes the total gain to society when the social cost is included The equilibrium quantity is greater than the efficient equilibrium quantity which translates to the total cost being greater than the total benefit which is clearly bad Therefore the consumption of coal actually causes problems to societyThe reason that focusing on the external costs is important especially in this instance with coal is because it affects the social outcome For instance when the social cost is low people who need money will work However when the social cost is higher people may need to
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