
-The figure above shows the market for pants.If the production of the pants results in an external cost from pollution that is the result of the dye used,then
A) 6 million pairs is the efficient quantity.
B) fewer than 6 million pairs is the efficient quantity.
C) more than 6 million pairs is the efficient quantity.
D) None of the above answers is necessarily correct because more information is needed about the size of the external cost.
E) None of the above answers are correct because it is impossible to tell whether the external cost results in underproduction or overproduction.
Correct Answer:
Verified
Q226: A public good
A) is a good that
Q229: A monopoly is
A) the single buyer of
Q231: When the cost of producing a product
Q232: A cost not borne by the producer
Q233: A benefit that accrues to people other
Q243: The concept of "the invisible hand" suggests
Q244: When underproduction occurs,
A) producers gain more surplus
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