A(n) ________ is a financial contract that provides annual payments until a specified year or until one's death.A) savings accou
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A.
If you recall, negative externalities arise when there is a divergence between marginal private cost and marginal social cost, the difference being the marginal external cost as shown from the poorly drawn diagram. If we got rid of the marginal external cost by producing less, then the externality would dissipate.
However, the question is weird as there are no options for compensation. What would rather happen is that whoever has the property rights will be compensated the size of the MEC and there would be social welfare, whereas the question only tackles removing the externality through stopping production.
If you recall, negative externalities arise when there is a divergence between marginal private cost and marginal social cost, the difference being the marginal external cost as shown from the poorly drawn diagram. If we got rid of the marginal external cost by producing less, then the externality would dissipate.
However, the question is weird as there are no options for compensation. What would rather happen is that whoever has the property rights will be compensated the size of the MEC and there would be social welfare, whereas the question only tackles removing the externality through stopping production.
Answer:
Since we are not given the equilibrium price or quantity, I drew a graph showing Pe and Qe as them.
If foreign firms start selling in the domestic market at a higher price, then the curve shouldn't modify, but if they start to sell at a lower price, the equilibrium price and quantity will shift to the left.
Pai = price after imports
Qai = quantity after imports
The second graph shows the equilibrium point for an individual firm.
