When producers operate in a market characterized by negative externalities, a tax that forces them to internalize the externality will
a. give sellers the incentive to account for the external effects of their actions.
b. increase demand.
c. increase the amount of the commodity exchanged in market equilibrium.
d. restrict the producers' ability to take the costs of the externality into account when deciding how much to supply.
a
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Refer to Figure 9.3. If the market is in equilibrium, the consumer surplus earned by the buyer of the 100th unit is
A) $0.50. B) $0.75. C) $1.50. D) $2.00. E) $2.75.
You own shares in a start-up internet company. If large swings in the stock market increase financial investors' concerns about market risk, then the price of your shares will ________, holding other factors constant.
A. either increase or decrease B. increase C. not change D. decrease