Suppose That Cookie Producers Create a Positive Externality Equal to $2

question 3

Multiple Choice

Suppose that cookie producers create a positive externality equal to $2 per dozen. What is the relationship between the equilibrium quantity and the socially optimal quantity of cookies to be produced?

• A)They are equal.
• B)The equilibrium quantity is greater than the socially optimal quantity.
• C)The equilibrium quantity is less than the socially optimal quantity.
• D)There is not enough information to answer the question.

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Definitions:

Reinforcement

The process of providing stimuli following responses that increase the frequency of the responses.

Behavior Frequency

The rate at which a specific behavior occurs over a designated period of time.

Anger And Resentment

Emotional states where anger involves strong feelings of displeasure, and resentment holds persistent bitterness against someone or something.

Negative Punishment

A behavioral psychology concept where decreasing undesired behaviors occurs by removing a desirable stimulus after the behavior.