When an industry is characterized by technology spillover, what should the government do to ensure that the market equilibrium equals the socially optimal equilibrium?
a. Impose a tax greater than the value of the technology spillover.
b. Not allow production of any product that causes a technology spillover.
c. Provide a subsidy equal to the value of the technology spillover.
d. Require producers to "clean up" any spillover that results from their production process.
c
Economics
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Which of the following examples best describes the concept of free entry?
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The profit-maximizing firm should continue hiring additional labor as long as: a. MRC < MRP
b. MRC > MRP. c. MRC = MRP. d. the MP of labor > 0.
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