Assume that production from an electric utility caused acid rain and that the government imposed a tax on the utility equal to the cost of the acid rain. This is an example of

When marginal cost is rising, what must happen to average variable cost?

a. It must be falling. b. It must be rising. c. It could be rising or falling. d. It must be constant.

Suppose the government mandates the installation of a certain type of pollution abatement equipment for the leather tannery industry

For some firms in the industry, installing this equipment may not be the most cost effective method of reducing pollution. Indicate whether the statement is true or false