Suppose firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. Which of the following is likely to be true in this case?
A) Price will be too low and output will be too large compared to the efficient equilibrium.
B) Price will be high and output will be large compared to the efficient equilibrium.
C) Price will be too low and output will be too small compared to the efficient equilibrium.
D) Price will be high and output will be small compared to the efficient equilibrium.
E) Both price and output will be the same as the efficient equilibrium.
Correct Answer:
Verified
Q17: Positive externalities include benefits received by a
Q21: Which of the following is an example
Q21: One way to overcome an adverse selection
Q23: Private costs are borne by:
A)the government.
B)the producer
Q24: A tax on firms that emit pollutants
Q25: If a positive externality results from higher
Q26: An example of a positive externality is:
A)congestion
Q27: The social cost of production is:
A)the sum
Q28: The failure of private incentives to provide
Q35: The over hunting of U.S. buffalo that
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents