Suppose a Firm Pollutes a River When It Produces a Product.To

question 55

Multiple Choice

Suppose a firm pollutes a river when it produces a product.To achieve the efficient amount of output,a government could impose a ________ that equals the ________ of the pollution.

• A) pollution charge; marginal social cost
• B) pollution charge; marginal external cost
• C) pollution tax; marginal social cost
• D) pollution tax; marginal external cost
• E) pollution subsidy; marginal social cost

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Definitions:

Operating Expenses

Costs associated with the day-to-day functions of a business outside of direct production costs, including items like rent, utilities, and payroll expenses.

Sales

Sales refer to the transactions where goods or services are exchanged for money, representing the primary source of revenue for most businesses.

Income Statement Data

Financial information that summarizes a company's revenues, expenses, and profits over a specific period.

Operating Expenses

Costs incurred in the day-to-day operations of a business, excluding direct material and labor costs related to the production of goods or services.