Production of a Good Produces Pollution That Is Very Damaging

question 36

Multiple Choice

Production of a good produces pollution that is very damaging with each additional unit.A monopoly facing a very elastic demand curve will most likely produce

• A) less than the social optimum of the good.
• B) more than the social optimum of the good.
• C) the social optimum of the good.
• D) no externality.

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Definitions:

Sole Ownership Rights

Exclusive legal entitlements granting the owner control over the use, development, and sale of property or intellectual assets.

Monopolistically Competitive Industry

An economic configuration in which numerous companies offer products that are alike but not exactly the same, permitting them a certain level of influence over the market.

Slightly Differentiated Product

A product that is mostly similar to others but has minor differences in quality, features, or branding that set it apart.

Natural Monopoly

A market situation where due to high fixed costs or barriers to entry, it is most efficient for production to be concentrated in a single firm.