Use the Following to Answer Questions

question 165

Multiple Choice

Use the following to answer questions :
Figure: MSB and MSC of Pollution
-(Figure: MSB and MSC of Pollution) Use Figure: MSB and MSC of Pollution.Assume that firms are the only beneficiaries of pollution and that costs are borne solely by others in the society.Suppose that pollution is unregulated.What level of emissions tax would move the level of pollution to the socially optimal level?

• A) $100 per tonne
• B) $800 per tonne
• C) $500 per tonne
• D) $300 per tonne

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Definitions:

Short Run

A period of time during which at least one of a firm's inputs is fixed, limiting its ability to increase production.

Long Run

A period in economics in which all factors of production and costs are variable, allowing for full adjustment to changes.

Total Revenue

Total revenue is the total income generated by a company from its sales of goods or services before any expenses are subtracted.

Total Cost

The sum of all costs incurred in the production of goods or services, including both fixed and variable costs.