The market below depicts supply, demand and marginal social cost in the widget market.1.000.900.800.700.000.500.400.30020255075100ten ard125 150 176 200To correct for the externality, what should be used?O a. A subsidy of $0.20b. A tax of $0.20OC. A subsidy of $0.30Od. A tax of $0.30

Positive Externality:It is an economic problem when people take benefit from the economic goods. It…

The market below depicts supply, demand and marginal social cost in the widget market. 1.00 De 0.90 0.80 0.70 0.00 0.50 0.40 0.30 020 25 50 75 100 125 150 176 200 To correct for the externality, what should be used? O a. A subsidy of $0.20 b. A tax of $0.20 OC. A subsidy of $0.30 Od. A tax of $0.30

The market below depicts supply, demand and marginal social cost in the widget market. 1.00 De 0.90 0.80 0.70 0.00 0.50 0.40 0.30 020 25 50 75 100 125 150 176 200 To correct for the externality, what should be used? O a. A subsidy of $0.20 b. A tax of $0.20 OC. A subsidy of $0.30 Od. A tax of $0.30

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 41P: Refer to Table 12.2. The externality created by the refrigerator production was 100. However, once...

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Question

The market below depicts supply, demand and marginal social cost in the widget market.
1.00
0.90
0.80
0.70
0.00
0.50
0.40
0.30
020
25
50
75
100
ten ard
125 150 176 200
To correct for the externality, what should be used?
O a. A subsidy of $0.20
b. A tax of $0.20
OC. A subsidy of $0.30
Od. A tax of $0.30

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