Author Question: Price will increase and output will decrease once government makes a firm (Read 60 times)

nevelica · **on:** Apr 19, 2019

Question 1

Due to a firm generating external costs, the government decides to ________ the firm. When this happens, the firm will produce ________ units of output than before the tax was imposed in order to continue maximizing profits.

◦ subsidize; fewer
◦ subsidize; more
◦ tax; fewer
◦ tax; more

Question 2

Price will increase and output will decrease once government makes a firm

◦ internalize a negative externality.
◦ externalize a negative externality.
◦ internalize a positive externality.
◦ externalize a positive externality.

Chocorrol77 · **Reply #1 on:** Apr 19, 2019

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