When there is a negative externality, the marginal private cost of production ________ the marginal social cost of production.
A) eliminates B) is less than C) is equal to D) is greater than
Question 2
Refer to Table 4-6. The table above lists the marginal cost of polo shirts by Marko's, a firm that specializes in producing men's clothing. If the price of polo shirts decreases from 15 to 10
A) there will be a shortage of polo shirts.
B) producer surplus will fall from 13 to 3.
C) the marginal cost of producing the third polo shirt will increase to 25.
D) consumers will buy no polo shirts.
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