Suppose a Particular Production Process Results in a Large Amount

question 161

Multiple Choice

Suppose a particular production process results in a large amount of pollution and the government decides to impose a tax to correct for this externality, such that the socially optimal output will be produced. The tax will have the effect of shifting the

• A)marginal private benefit curve to the right.
• B)marginal social benefit curve to the right.
• C)marginal private cost curve to the left.
• D)marginal social cost curve to the left.
• E)marginal private cost curve to the right.

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Definitions:

Patents

Legal documents granting an inventor exclusive rights to their invention, preventing others from making, using, or selling the invention for a certain period of time.

Pharmaceutical Companies

Organizations dedicated to developing, producing, and marketing drugs or pharmaceuticals licensed for use as medications.

Monopoly Position

A situation in which a single company or entity has exclusive control over a particular market or industry, eliminating competition.

Lower Prices

A decrease in the general level of prices of goods and services, making them more affordable to consumers.