Multiple Choice
When farmers raise hogs,there are a number of external costs.In particular,hogs generate methane gas.If the marginal external cost is $100 per hog and the government imposes a tax of $200 per hog,then at the equilibrium price and quantity of hogs:
A) too few hogs will be raised.
B) the price will be less than the marginal social cost.
C) the price will be less than the marginal social benefit.
D) the price will be less than the marginal cost to hog farmers.
Correct Answer:
Verified
Correct Answer:
Verified
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