Table 10-3 the Following Table Shows the Marginal Costs for Each of Each

question 323

Multiple Choice

Table 10-3
The following table shows the marginal costs for each of four firms (A,B,C,and D) to eliminate units of pollution from their production processes.For example,for Firm A to eliminate one unit of pollution,it would cost $54,and for Firm A to eliminate a second unit of pollution it would cost an additional $67.

-Refer to Table 10-3.If the government charged a fee of $69 per unit of pollution,how many units of pollution would the firms eliminate altogether?

• A) 7
• B) 8
• C) 9
• D) 10

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Definitions:

Long-Run Equilibrium

Long-run equilibrium occurs in a market when all firms earn normal profits, and no new firms have an incentive to enter or exit, resulting in market stability over time.

Average Total Cost

The cost of producing each unit, calculated by dividing the overall production expenses by the quantity of units manufactured.

Normal Profit

The minimum level of profit needed for a company to remain competitive in the market, factoring in the cost of opportunity.

Long-Run Equilibrium

A state in which all factors of production and costs are variable, and firms in a competitive market make just enough profit to cover their costs.