Use the Following Figure to Answer the Question : Figure

question 25

Multiple Choice

Use the following figure to answer the question : Figure 20-1 : 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.
-Refer to Figure 20-1.Which of the following policies can be adopted by the government to increase production from the equilibrium level to the efficient level?

• A)Provide a subsidy of $30 per unit
• B)Impose a tax of $100 per unit
• C)Provide a subsidy of $100 per unit
• D)Impose a tax of $20 per unit

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Definitions:

Third Party

An entity or individual that is not directly involved in a legal agreement or contract but may be affected by its outcomes or has an indirect interest in it.

Camera

A device used to capture images or videos, consisting of a lens and a body that records visual information on a medium or sensor.

Trespass to Chattels

A legal term referring to the intentional interference with someone else's personal property without permission.

Detinue

A legal action to recover possession of personal property wrongfully taken or retained.