When the marginal benefit and marginal cost of sodas are equal, then
A) the production of sodas might be allocatively efficient but it is definitely production inefficient.
B) the allocatively inefficient amount of sodas is being produced.
C) more sodas should be produced to reach the allocatively efficient quantity.
D) fewer sodas should be produced to reach the allocatively efficient quantity.
E) the allocatively efficient amount of sodas is being produced.
E
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Distinguish between implicit and explicit costs and give examples of each. In addition, explain how explicit and implicit costs affect the distinction between economic profit and accounting profit
What explains the distinction between the two measures of profit?
Suppose that in the market for paper, demand is p = 100 - Q. The private marginal cost is MCp = 10 + Q. Pollution generated during the production process creates external marginal harm equal to MCe = Q. What specific tax would result in a competitive market producing the socially optimal quantity of paper?
What will be an ideal response?