In the Case of a Negative Externality,in Order to Achieve

question 55

Multiple Choice

In the case of a negative externality,in order to achieve efficiency the government must set the _________________ equal to the marginal ____________________.

• A) tax; external costs
• B) tax; external benefits
• C) subsidy; external costs
• D) subsidy; external benefits
• E) tax; private costs

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Definitions:

Restrain Competition

Actions or agreements that limit free trade and competition in a market.

Monopoly Power

The exclusive control by one company over an entire industry or sector, allowing it to set prices and limit competition.

Antitrust Purposes

Intended to promote or maintain market competition by regulating anti-competitive conduct.

Local Government Antitrust Act

Legislation that provides immunity from antitrust laws for certain activities conducted by local governments or within their official capacities.