By Requiring Car Producers to Install Emission Control Devices on Cars

question 165

Multiple Choice

By requiring car producers to install emission control devices on cars, the government forces these producers to internalize some of the external costs of auto pollution. This will lead to the equilibrium
Price of cars

• A) decreasing and the quantity increasing.
• B) decreasing and the quantity decreasing.
• C) increasing and the quantity increasing.
• D) increasing and the quantity decreasing.