In a market where firms are able to reduce their private costs by shifting costs onto others, which of the following will not happen?
a. Inefficiencies will occur
b. Negative externalities will be observed.
c. The market prices of products produced by firms will be too low relative to the social optimum.
d. Output of the good being produced will be too low.
d
You might also like to view...
When a household's disposable income falls to zero, what do we expect will happen?
A) The household's consumption spending also falls to zero. B) The household will maintain a positive level of saving. C) The household will maintain its previous level of consumption. D) Consumption will fall to the level of autonomous consumption.
A decrease in the price of peanuts will cause a leftward shift of the supply curve of peanut butter
a. True b. False
If a 1 percent increase in price causes a 0.5 percent increase in quantity supplied, then supply is
A) elastic. B) inelastic. C) unit elastic. D) infinite.
What is the difference between a normal good and an inferior good? How does this relate to the demand curve?
What will be an ideal response?