Figure 10-5 -Refer to Figure 10-5.Which of the Following Statements Is Correct

question 19

Multiple Choice

Figure 10-5
-Refer to Figure 10-5.Which of the following statements is correct?

• A) To induce firms to internalize the externality in this market,the government should impose a tax measured by P₂ - P₀.
• B) To induce firms to internalize the externality in this market,the government should offer a subsidy measured by P₂ - P₀.
• C) To induce firms to internalize the externality in this market,the government should impose a tax measured by P₂ - P₁.
• D) There is no externality in this market.

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Substantive Law

The part of law that deals with the rights and duties of people and the punishments for those who violate these laws.

Requests for Admissions

A pre-trial procedure in civil litigation where one party requests the other to admit the truth of certain facts, thereby narrowing the scope of the dispute.

Interrogatories

A set of formal written questions issued by one party in a lawsuit to another party, which must be answered under oath.

Demurrers

A legal pleading that objects to the sufficiency of the opposing party’s pleadings, without addressing the facts, and asks the court to dismiss the case on legal grounds.