Examlex

Solved

Suppose That Flower Gardens Create a Positive Externality Equal to $1

question 190

Multiple Choice

Suppose that flower gardens create a positive externality equal to $1 per plant. What is the relationship between the equilibrium quantity and the socially optimal quantity of plants grown?


Definitions:

Marginal Cost

The heightened expense incurred by fabricating an extra unit of a product or service.

Average Total Cost

The overall expense of manufacturing, including both fixed and variable costs, divided by the amount of product made.

Extra Unit

Refers to an additional quantity of a good or service, often used in the context of calculating marginal costs or benefits.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced, indicating the cost per unit of output.

Related Questions