A tax equal to the external marginal cost of an activity yields the efficient level of production because the tax

A) achieves the competitive equilibrium.
B) forces producers to face all costs of production including the external cost.
C) ensures greater profits for the firm.
D) eliminates all pollution.


B

Economics

You might also like to view...

Using the information in Table 6.2, the inflation rate from 2014 to 2015 is about

A) 26 percent. B) 38 percent. C) 42 percent. D) 49 percent.

Economics

Sammy's Inc competes with a few other firms because there are natural barriers to entry. Sammy's operates in

A) a perfectly competitive market. B) an oligopoly. C) a monopolistically competitive market. D) a monopoly. E) a natural monopolistically competitive market.

Economics

Refer to Figure 7-5. With insurance and a third-party payer system, what price do consumers pay for medical services?

A) $40 B) $55 C) $65 D) > $65

Economics

Refer to the table below. If the senior manager learns that either a Good or Fair market will exist when the drug is introduced to the market, which drug should the senior manager not pursue?


The senior manager of Rx Pharmaceuticals needs to decide which of three drugs the company should consider developing. The estimated profit for each of the drugs differs depending on the market conditions when the respective drugs are introduced to the market. The above table summarizes the estimated profit for each drug under each of the three market conditions; Good, Fair, and Poor.

A) Drug X
B) Drug Z
C) Drug Y
D) all of the drugs

Economics