A negative externality causes a private market to produce which of the following quantities?
a) less than market equilibrium
b) more than market equilibrium
c) more than is socially desirable
d) less than is socially desirable
Ans: c) more than is socially desirable
Economics
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The marginal cost of a monopolist is constant and is $10. The marginal revenue curve is given as follows: MR = 100 - 2Q The profit maximizing price is
A) $70. B) $65. C) $60. D) $55. E) $50.
Economics
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Economics