Three methods the government can use to cope with the external cost from pollution are
A) pollution taxes, subsidies, and outright bans.
B) pollution taxes, regulations, and subsidies.
C) marketable permits, pollution subsidies, and pollution taxes.
D) pollution charges, marketable permits, and pollution limits.
E) vouchers, pollution subsidies, and pollution taxes.
Question 2
A monopoly can arise when
A) there are diseconomies of scale.
B) there are barriers to entry and no close substitutes for the good being produced.
C) a firm cannot price discriminate.
D) firms engage in rent seeking.
E) a firm must set MR equal to MC in order to maximize its profit.