Question 1 If there is no external cost, then marginal social cost A) first incr

Question

Question 1 If there is no external cost, then marginal social cost A) first increases and then decreases as output increases. B) decreases as output increases. C) is constant regardless of the level of output. D) is unrelated to output levels. E) increases as output increases. Save Question 2 If producing a good or a service creates pollution, then A) at the unregulated, competitive market equilibrium quantity, marginal social benefit and marginal social cost are equal. B) the industry's supply curve includes the extra cost of pollution. C) an unregulated competitive market produces an efficient output. D) at the unregulated, competitive market equilibrium quantity, marginal cost is greater than the equilibrium price. E) at the unregulated, competitive market equilibrium quantity, marginal social benefit is less than the equilibrium price.

Explanation / Answer

1.
E. increases as output increases

2.
A.
D.

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