Refer to the above figure. An external cost exists. The amount of that cost is represented by
A) P2.
B) Q1.
C) the vertical distance between point A and the supply curve S1.
D) the distance between C and A.
C
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Although all points on the production possibilities frontier are efficient, that alone does not determine which point is “best” for the society.
Answer the following statement true (T) or false (F)
In a supply and demand figure, the equilibrium price and quantity are found at the
A) point where quantity supplied equals quantity demanded. B) horizontal intercept of the demand curve. C) vertical intercept of the supply curve. D) horizontal intercept of the supply and the demand curves.
The use of "most-favored-customer" clauses is an example of
A) incenting members to maintain the cartel, because if they lower the price for one customer, they have to lower it for previous customers as well. B) incenting members to maintain the cartel, because if they raise the price for one customer, they have to raise it for previous customers as well. C) giving customers special perks for purchasing goods from members of the cartel. D) selling higher quality goods and services to favorite customers.
In perfect competition, marginal revenue always equals
A. total revenue. B. price. C. average cost. D. marginal fixed cost.