Refer to the table below, which describes the market for a household cleaner, whose chemicals generate air pollution, a negative externality. Marginal benefits $1,000 $900 $800 Quantity 3,000 3,500 4,000 4,500 5,000 $700 $600 Private marginal costs $400 $500 $600 $700 $800 Which of the following options could be used for society to produce the socially optimal amount of cleaner? Apply a per-unit credit for companies producing the cleaner Subsidize the production of the cleaning solution Ban all sales of the cleaner Apply a per-unit tax on production Private + social marginal costs $8 $700 $800 $900 $1,000

Refer to the table below, which describes the market for a household cleaner, whose chemicals generate air pollution, a negative externality. Marginal benefits $1,000 $900 $800 Quantity 3,000 3,500 4,000 4,500 5,000 $700 $600 Private marginal costs $400 $500 $600 $700 $800 Which of the following options could be used for society to produce the socially optimal amount of cleaner? Apply a per-unit credit for companies producing the cleaner Subsidize the production of the cleaning solution Ban all sales of the cleaner Apply a per-unit tax on production Private + social marginal costs $8 $700 $800 $900 $1,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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