Figure 10-2

question 318

Multiple Choice

Figure 10-2. The graph depicts the market for plastic.
-Refer to Figure 10-2. Suppose that the production of plastic creates a social cost which is depicted in the graph above. Without any government regulation, what price will the firm charge per unit of plastic?

• A)$4.00
• B)$6.00
• C)$7.00
• D)$10.00

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Definitions:

Cash Dividends

Payments made by a corporation to its shareholder members from its profits or reserves.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, also known as shareholders' equity.