Exhibit 14-1 Private and social cost
The perfectly competitive profit-maximizing firm in Exhibit 14-1 creates water and air pollution as a consequence of producing its output of pigs. If pollution costs are borne by third parties, the firm will maximize economic profit by choosing to:
A. voluntarily incur costs to reduce its pollution.
B. produce at output rate Q3.
C. produce at output rate Q2.
D. produce at output rate Q4.
Answer: D
You might also like to view...
National health insurance programs:
A. can increase use of health clinics versus traditional village doctors, who often have no medical training. B. are usually too costly for developing nations to implement. C. have solved the problem of providing high-quality care in places like India. D. are always less efficient than privatized programs.
If the price of flashlights in production increases, then supply of ______ would most likely increase.
a. batteries b. pencils c. olive oil d. iron ore
The more restrictions an airline puts on tickets, the ______.
a. more expensive they are b. cheaper they are c. more competition there is for them d. easier it is to sell them
If output is rising then each of the following must be constant or rising except
A. total cost. B. variable cost. C. marginal cost. D. fixed cost.