Use the Following Figure to Answer the Question : Figure

question 62

Multiple Choice

Use the following figure to answer the question : Figure 20-2 : shows 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:

Advertise

The act of promoting products, services, or brands to potential customers through various media.

Expensive Item

An object that is high in price or costs a significant amount of money, often implying it is of high quality or value.

Federal Hazardous Substances Act

A United States federal law that regulates the labeling and handling of hazardous substances to ensure consumer safety.

Warning Labels

Notices affixed to products providing information about potential risks or dangers associated with their use.