Which of the following is true of the market equilibrium in the presence of negative externalities?
a. It is the intersection of the social cost curve and the demand curve
b. It is the intersection of the private cost curve and the demand curve.
c. Net social welfare is maximized at the equilibrium.
d. Market output is less than the socially optimal output at the equilibrium.
b
Economics
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Ernie's Earmuffs produces 200 earmuffs per year at a total cost of $2,000 and $400 of this cost is fixed. If he increases output to 220 earmuffs, his total cost increases to $2100, and his fixed cost remains $400. What is Ernie's marginal cost per earmuff?
A) $105 B) $35 C) $9.55 D) $5
Economics
The above figure shows a firm in monopolistic competition. At the profit maximizing level of output, excess capacity for the firm is equal to
A) 0 units per day. B) 4 units per day. C) 8 units per day. D) 16 units per day.
Economics