Which of the following factors will help determine how the costs of social regul
ID: 1129722 • Letter: W
Question
Which of the following factors will help determine how the costs of social regulation are split between consumers and producers?
The average total costs of the firm before regulation
The number of producers in the market
The price elasticities of demand and supply
The number of consumers in the market
The quantity produced by the firm
A.The average total costs of the firm before regulation
B.The number of producers in the market
C.The price elasticities of demand and supply
D.The number of consumers in the market
E.The quantity produced by the firm
Explanation / Answer
The price elasticities of demand and supply
Any social regulation, be it tax or subsidy leads to change in price which in turn leads to change in demand and supply as per elasticity of demand and supply.
C.The price elasticities of demand and supply
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