Since air pollution creates a negative externality: Select one: a. social welfare will be enhanced...

Question

Since air pollution creates a negative externality: Select one: a. social welfare will be enhanced when some, but not all air pollution is eliminated b. social welfare is optimal when all air pollution is eliminated c. governments should encourage private organisations to consider only private costs d. the free market result maximises social welfare

Komalavalli · Accepted Answer

Option B is correct: Social welfare is optimal when air pollution is eliminated.
Explanation:
Without social cost firm will produce more output resulting in more pollution. After government intervention through taxes or pollution permits leads to reduce pollution and optimal output is produced.

Since air pollution creates a negative externality: Select one: a. social welfare will be enhanced when some, but not all air pollution is eliminated b. social welfare is optimal when all air...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment