If People Took Externalities Like Pollution into Consideration,on Balance They

question 54

Multiple Choice

If people took externalities like pollution into consideration,on balance they would consume less of the good causing these externalities.This tells us:

• A)the market equilibrium is not maximizing surplus.
• B)the efficient outcome for society is at a lower quantity.
• C)market discouraging actions,like taxation,can help bring efficiency to markets where externalities are present.
• D)All of these statements are true.

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Definitions:

Price

The total money needed for acquiring a good, service, or asset.

Short Run

A period during which at least one of a firm's inputs is fixed, limiting its capacity to adjust to changes in demand.

TC

Total Costs, the sum of all costs incurred in the production of goods or services.

TR

Total Revenue; the total receipts from sales of goods or services provided by a company before any deductions are made.