In the Figure Given Below,the Competitive Supply Curve of a Commodity

question 66

Multiple Choice

In the figure given below,the competitive supply curve of a commodity is given by S₁,the private marginal benefit curve is D₁,the marginal social benefit curve is D₂,and the MB_E curve reflects the marginal external benefits.
-From Figure 20-2,we can conclude that to help the market attain the efficient level of output,the government should:

• A)provide a subsidy of $8 per unit to the producer.
• B)impose a tax of $4 per unit of production.
• C)provide a subsidy of $3 per unit to the producer.
• D)impose a tax of $3 per unit of production.

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Definitions:

Sampling Distribution

The likelihood distribution of a statistic derived from a random sample.

Biased Estimator

An estimator is considered biased if it consistently overestimates or underestimates the parameter it is estimating.

Confidence Level

The probability that a confidence interval contains the true population parameter, expressing the degree of certainty in estimation.

Sample Statistic

A numerical measure that describes an aspect of a sample of the population data.