A consumption tax generally will be borne according to labor earnings.

A perfectly competitive firm is producing 50 units of output and selling at the market price of $23. The firm's average total cost is $20. What is the firm's economic profit?

A) $23 B) $150 C) $1,000 D) $1,150 E) $50

Free riding is not a problem in the market for a private good because

A) people who do not pay for the good can be excluded from consumption. B) the good is a rival good. C) the market eliminates the problem of externalities. D) The question errs because free riding is a problem in providing private goods.