In the above figure, market equilibrium at point E yields the quantity X. The quantity X* is socially optimal amount. The government can achieve the optimal outcome by
A. establishing a tax of P3 - P1 per unit of the good sold.
B. setting the price at P4.
C. establishing a tax of P3 - P2 per unit of the good sold.
D. setting the price at P1.
Answer: A
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In any subgame perfect equilibrium to an infinitely repeated Prisoners' Dilemma game, the players will end up cooperating.
Answer the following statement true (T) or false (F)
Refer to the table above. If the firm is a monopolistic competitor, up to what output will the firm produce?
A) 2 units B) 4 units C) 5 units D) 6 units
A horizontal merger
a. combines similar firms that serve separate markets. b. combines firms that produce similar products. c. enables a company to control each stage of the production process: from raw materials to the final marketing of the product. d. enables similar firms to form a cartel.
The ________ is a rule of thumb that estimates the frequency of an event by the ease with which it is possible to summon examples from memory.
A. availability heuristic B. adaptive rationality standard C. Weber-Fechner law D. representative heuristic