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Author Question: A perfectly competitive steel mill that produces large amounts of pollution (a negative externality) ... (Read 192 times)

renzo156

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  • Posts: 526
on: Jul 1, 2018
A perfectly competitive steel mill that produces large amounts of pollution (a negative externality) will, from a social point of view,
 a. produce too little steel.
  b. produce the socially optimal quantity of steel.
  c. produce too much steel.
  d. produce too much steel only if it installs pollution control equipment.

Question 2

In the case of a negative externality, the social marginal cost will
 a. exceed the private marginal cost.
  b. be equal to private marginal cost.
  c. fall short of private marginal cost.
  d. bear no significant relation to private marginal cost.


tandmlomax84

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Reply #1 on: Jul 1, 2018
Answer to Question 1

c

Answer to Question 2

a


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