Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A. a positive externality.
B. a negative externality.
C. regressive taxation of the product.
D. a public good which should be produced.
Answer: A
Economics
You might also like to view...
Which of the following provides support for the use of discretion in economic policy-making?
A) any policy rule that is based on a particular model will prove wrong if that model is wrong B) the existence of a political business cycle C) the conclusions of Friedman and Schwartz with respect to monetary and fiscal policy D) the Watergate scandal
Economics
Explain the short-run effects on output and the price level from a decrease in the aggregate-demand curve
Economics