If the firm is able to reduce MC from MC0 to MC1 the firm will produce at point ________ on the new demand curve and lower price to ________

Beginning from a situation where there were no clear property rights to clean air and water: a. subsidies could not improve efficiency in cases of external benefits

b. subsidies could not improve efficiency in cases of external costs. c. taxes could not improve efficiency in cases of external costs. d. neither external benefits nor external costs could improve efficiency in either the case of external benefits or the case of external costs.

Table 10.1 shows the cash flows and discounted cash flows for three mutually exclusive projects available to a company. Assume an interest rate of 5%. Which project has the highest NPV?

A. Project A

B. Project B

C. Project C

D. It cannot be determined from the information given.