To Ensure an Efficient Equilibrium Outcome When External Costs Are

question 213

Multiple Choice

To ensure an efficient equilibrium outcome when external costs are present in the market, the government could:
I. implement a tax equal to the level of the external cost.
II. create a system of tradable allowances to reduce output to the efficient quantity.
III. institute command and control policies to reduce output to the efficient quantity.

• A) I and II only
• B) II and III only
• C) II only
• D) I, II, and III

Recognize legal and illegal practices regarding price control in oligopolies.

Differentiate between various market structures, with a focus on oligopoly characteristics.

Identify factors leading to the success or failure of collusion in oligopolistic industries.

Analyze the impact of market share distribution on market concentration and competition.

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