When a firm creates negative externalities by polluting, in order to achieve the socially efficient outcome:
a. the firm's production should be prohibited
b. the firm's production should be increased and the price of its output should be decreased.
c. the firm's production should be increased and the price of its output should be increased.
d. the firm's production should be reduced and the price of its output should be increased.
d
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The basic type of intervention by central banks under the managed floating exchange rate system is to:
A. Readjust the peg for exchange rates B. Buy and sell currencies to influence supply and demand for foreign exchange C. Renegotiate the rate at which foreign currencies can be converted into gold D. Make pronouncements but then do nothing and let the market set the exchange rate
If total cost is $1,000 when output is zero, and total cost is $1,200 when output is one, and total cost is $1,500 when output is two, then which of the following is true?
A. Total fixed cost is $1,500. B. The marginal cost of producing the first unit of output is $1,200. C. The marginal cost of producing the second unit of output is $300. D. The average fixed cost is $750 when two units of output are produced.