1. A company decides to eliminate the pollution it was causing. The result was a "socially efficient level of production, but the cost of production increased. What happens to the equilibrium price and quantity demanded? 1. The price decreases and the quantity demanded decreases 2. The price increases and the quantity demanded increases 3. The price increases and the quantity demanded decreases 4. The price decreases and the quantity demanded decreases

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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1. A company decides to eliminate
the pollution it was causing. The
result was a "socially efficient
level of production, but the cost of
production increased. What
happens to the equilibrium price
and quantity demanded?
1. The price decreases and the
quantity demanded decreases
2. The price increases and the
quantity demanded increases
3. The price increases and the
quantity demanded decreases
4. The price decreases and the
quantity demanded decreases
Transcribed Image Text:1. A company decides to eliminate the pollution it was causing. The result was a "socially efficient level of production, but the cost of production increased. What happens to the equilibrium price and quantity demanded? 1. The price decreases and the quantity demanded decreases 2. The price increases and the quantity demanded increases 3. The price increases and the quantity demanded decreases 4. The price decreases and the quantity demanded decreases
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