In an Unregulated Market with an External Benefit,the

question 41

Multiple Choice

In an unregulated market with an external benefit,the

• A) quantity produced is greater than the efficient quantity.
• B) price charged is too high for efficiency.
• C) quantity produced is less than the efficient quantity.
• D) producer is causing pollution but not paying for it.
• E) government might impose a tax to help move the market toward the efficient amount of production.

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Definitions:

Third-Degree Price Discrimination

Practice of dividing consumers into two or more groups.

Price Elasticities

Measures of how the quantity demanded or supplied of a good responds to a change in its price.

Marginal Revenue

The additional income gained from selling one more unit of a product or service.

Third-Degree Price Discrimination

A pricing strategy where a seller charges different prices to different consumer groups for the same product or service, based on varying demand elasticities.