Refer to the data. Suppose that entry into the industry changes this firm's demand schedule from columns (1) and (3) shown to columns (2) and (3). Economic profit will:

The above figure shows the market for steel ingots. If the market is competitive, then to achieve the socially optimal level of pollution, the government can

A) outlaw the production of steel. B) institute a specific tax of $25. C) institute a specific tax of $50. D) institute a specific tax equal to area b.

A theory or a model

A) is a simplified, abstract view of reality. B) is based on each economist's value judgments. C) is a detailed analysis of what ought to be. D) captures all aspects of the real world.