If a perfectly competitive firm charges the market price of $14 per unit,
a. its marginal revenue is $14, and its average revenue is less than $14 per unit
b. it will sell no output
c. its average revenue is $14, and its marginal revenue is less than $14 per unit
d. its average revenue is $14, and its marginal revenue is $14
e. its average and marginal revenue are $14 only for the first unit sold
D
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GDP equals hours of work times
a. labor force. b. output per hour. c. population. d. capital stock.
Refer to Negative Externality. Suppose there are no transactions costs. Also suppose the externality is internalized when the damaged parties offer producers a bribe of $5 per unit to reduce their production. Coase's analysis indicates that social gain in this situation will equal
The following questions refer to the accompanying diagram, which shows the effects of a negative externality created by an industry's production. The equilibrium quantity in the absence of any attempt to internalize the externality is QE, and the optimal quantity according to a Pigovian analysis is QO.
a. area A + B + F.
b. area A + B + F - E.
c. area A + B + C + D + F + G + H.
d. area A + B + C + F + G.