The Demand Curve and Supply Curve for a Good Are

question 82

Multiple Choice

The demand curve and supply curve for a good are given by Q^D = 100 - 5P and Q^S = 1.25P - 2.5. Suppose the production of this good creates a negative externality, where the external marginal cost is constant at $2. Assuming the government implements the appropriate per-unit tax to achieve the socially optimal outcome, sellers receive a price of $_____ net of the tax.

• A) 16.80
• B) 14.80
• C) 16.00
• D) 14.00

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Definitions:

Portfolio Owner

An individual or entity that holds a collection of investments, including stocks, bonds, real estate, or other financial assets, and is responsible for the management and decision-making of the portfolio.

High Average Returns

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Equities

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Probability Distribution

A function in mathematics that determines the probability of each potential outcome in an experiment.