To Internalize a Consumption Externality in the Market for a Toxic

question 33

Multiple Choice

To internalize a consumption externality in the market for a toxic chemical

• A) a unit subsidy can be offered on production equal to the MEC
• B) a unit tax can be imposed equal to ‒MEB
• C) a tax should be set equal to the MSC
• D) none of the above

Apply knowledge of the HHI to assess monopoly power and market dominance.

Understand the key characteristics that define different market structures, such as monopolies, oligopolies, and monopolistic competition.

Identify the factors determining a firm's market power and its ability to influence market price.

Recognize the impact of substitutes and product differentiation on a firm's pricing power and market behavior.

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Definitions:

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Marketing ROI

A measure of the profitability generated by marketing efforts, calculated as the return from a marketing investment divided by the cost of that investment.