When the free market produces less than the socially optimal quantity of a good,
a. negative externalities must be present
b. marginal social cost must exceed marginal private cost
c. marginal private benefit must exceed marginal social benefit
d. the government should tax production of the good
e. there has been a market failure
E
Economics
You might also like to view...
If the MPS is 0.4 and t is 0.3, then the tax multiplier is about -1.03.
Answer the following statement true (T) or false (F)
Economics
A firm's long-run average cost curve is increasing as output increases over all levels of output. As a result
A. small firms and large firms will have identical average costs. B. small firms would have higher average costs of production than large firms. C. there should be only one firm in the industry. D. there should be more than one firm in the industry.
Economics