Suppose a Tax Equal to the Value of the Marginal

question 98

Multiple Choice

Suppose a tax equal to the value of the marginal external cost at the optimal output is imposed on a pollution generating good. All of the following will result from the tax except

• A) an increase in the equilibrium market price.
• B) a decrease in the equilibrium quantity produced and consumed.
• C) a decrease in market supply of the good.
• D) an increase in the demand for the good.

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Definitions:

Conflict Management Strategy

An approach used to address and resolve conflict in a constructive manner, balancing the concerns of all parties involved.

Competition

A situation in which entities strive against one another to attain a goal or superior position.

Win-win Strategy

A conflict resolution and negotiation approach where all parties involved gain something of value, ensuring mutual benefit.

Conflict Management Strategies

Techniques and approaches used to handle and resolve disputes in a constructive manner.