Oftentimes, the socially optimal quantity for a product that imposes external costs on the society is not zero, but something greater than zero. This is because completely eliminating the externality would involve:
A. A much greater marginal benefit than marginal cost
B. A much greater marginal cost than marginal benefit
C. Having shortages in the market
D. Having surpluses in the market
B. A much greater marginal cost than marginal benefit
Economics
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A price floor set above the equilibrium price will
A) clear the market for the good. B) result in a shortage of the good. C) result in a surplus of the good. D) force some firms in this industry to go out of business.
Economics
Why do high fixed costs force firms to shut down temporarily or shut down forever?
What will be an ideal response?
Economics