A firm will avoid producing additional emissions whenever the fee is

The figure above shows Sam's budget line. Which of the following would result in Sam's budget line rotating inward and not changing its vertical intercept?

A) a decline in his preference for coffee B) a fall in the price of a gallon of gasoline C) a decrease in Sam's income D) an increase in the price of a pound of coffee

In contrast with perfect competition, excess capacity characterizes monopolistic competition. Excess capacity is due to which of the following?

A) Monopolistically competitive firms face downward-sloping demand curves. In the long run, firms produce where their demand curves are tangent to their long-run average total cost curves. B) Monopolistically competitive firms produce at the minimum point on their average total cost curves. C) Monopolistically competitive markets have low barriers to entry. D) Monopolistically competitive firms produce where marginal revenue is equal to marginal cost.