Figure 16.2Consider Figure 16.2, which depicts the supply and demand for coal. Assume coal production creates external costs. If PE and QE are the equilibrium price and quantity of coal without government regulation, a pollution tax on the production of coal would ________ the price of coal relative to PE and ________ the quantity of coal relative to QE.

Refer to Figure 16-5. Suppose the firm represented in the diagram decides to use a two-part pricing strategy such that it charges a fixed fee and a per-unit price equal to the competitive price

(This is also called an optimal two-part tariff.) What is the per-unit price it should charge, if any? A) It should not charge a price per unit; just a flat fee to consume as much of the product as desired. B) It should charge a range of prices from $40 to $12. C) $12 D) $16

When firms cooperate without an explicit agreement, they are engaging in

a. explicit collusion b. tacit collusion c. reverse collusion d. inclusion e. rent seeking