Table 17-11 Only Two Firms, ABC and XYZ, Sell a Particular Product

question 139

Multiple Choice

Table 17-11
Only two firms, ABC and XYZ, sell a particular product. The table below shows the demand curve for their product. Each firm has the same constant marginal cost of $8 and zero fixed cost.
-Refer to Table 17-11. What is the socially efficient quantity of the product?

• A)25
• B)35
• C)50
• D)70

Understand how liability rules and injunctions can be used to manage externalities.

Realize the role of government and private sector in regulating externalities through permits, taxes, and subsidies.

Analyze the implications of assigning and negotiating property rights in different contexts.

Understand the concept of environmental economics and its approach to managing pollution and external costs.

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Definitions:

Potato Chips

Thin slices of potato that are fried or baked until crisp and served as a snack.

Tornado Siren

An audible siren or alarm system used to warn people in a specific area about the imminent threat of a tornado.

Benefit

An advantage or profit gained from something.

Excludable

A characteristic of a good or service that allows its owner to prevent others from using it without paying for it.