If the production of paper causes economic damage to a community, allowing the market to set the price of paper equal to the private marginal cost of producing paper will
a. generate less than the optimal quantity of paper produced
b. generate more than the optimal quantity of paper produced
c. generate an equilibrium price that is higher than the price associated with the market's most efficient level of output
d. cause some but not all paper producers to go out of business
e. benefit society because of externalities generated by the production
B
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The use of trade barriers to enforce standards abroad raises all of the following concerns EXCEPT
A) the potential deadweight losses in consumption and production at home. B) the lack of agreement over specific content of standards. C) the potential for the use of trade barriers to erupt into a bigger trade war. D) the difficulty of knowing whether some of the concerns are over standards or veiled protectionism. E) only small countries may be able to use trade barriers effectively.
The demand curve facing a monopolist
a. is kinked at the market price b. is perfectly elastic c. lies above its marginal revenue curve d. lies below its marginal revenue curve e. is the same as its marginal revenue curve