Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
dry cleaners use chemical to clean clothes that have external costs. if the marginal external cost is 2 per garmet cleaned and the goverment levies a corrective tax of $1 per garment. which this new tax:
-A. the price will be above the marginal cost to produce refrigerators
B. the price will be below the marginal social benefit
C. the price will be above the marginal social cost
D. not enough garments will be cleaned
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