In the Figure Given Below,D₁ and S₁ Are the Private

question 5

Multiple Choice

In the figure given below,D₁ and S₁ are the private demand and supply curves,of a commodity produced by a competitive firm.S₂ reflects the social marginal cost of production,while S₀ represents the external marginal cost.
-In Figure 20-1,if the government levies a tax of $8 per unit of output,then:

• A)the marginal social benefit will exceed the marginal social cost and the good will be underproduced.
• B)marginal social benefit will not exceed the marginal social cost and the good will not be overproduced.
• C)marginal social benefit will exceed the marginal social cost and the good will be overproduced.
• D)marginal social cost will exceed the marginal social benefit and the good will be overproduced.

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Definitions:

Scientific Enquiry

A systematic approach to investigating questions and testing hypotheses by experimental or observational means.

Observations

The act of monitoring or recording behavior, events, or changes in a systematic way as part of scientific research.

Pseudoscience

Pseudoscience refers to practices or beliefs that claim to be scientific and factual but lack empirical evidence and are not supported by the scientific method.

Behavioral Science

The study of human and animal behavior through observation, experimentation, and analysis.