The Optimal Quantity of a Negative Externality Is Zero If

question 95

Multiple Choice

The optimal quantity of a negative externality is zero if:

• A)it kills many people.
• B)it is costly to negotiate a Coasean solution.
• C)people vote against it in a democratic election.
• D)the marginal cost of reducing it is zero.

Understand the conditions for long-run equilibrium in purely competitive markets and the achievement of normal economic profits.

Recognize the allocation efficiency in pure competition where production occurs at the output level where P = MC.

Comprehend the differences between short-run and long-run supply curves in purely competitive industries.

Describe the effect of new firms entering or existing firms leaving a purely competitive market on market supply and equilibrium.

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Definitions:

Hydraulic Assist

An external power brake assist system that uses hydraulics, typically from the power steering system to a hydraulic power brake booster.

Lateral Acceleration Sensor

A device in a vehicle that measures the sideways acceleration to help with stability control and other functions.

Slip Rate

A term used to describe the rate at which one surface slides over another, commonly referenced in automotive and mechanical engineering contexts.

Longitudinal Speed

The velocity of an object in the direction of its length, often used in automotive contexts to describe forward or backward movement.