Question

When the price of a good increases, it undoubtedly hurts individual consumers, since they now have to pay more for a particular good. However, there are some cases in which a price increase can actually serve the public interest.
Which of the following is an example of a price increase that serves the public interest? Check all that apply.

(A) A monopolist sets its price above that which would occur in a perfectly competitive market.
(B) The price for a hunting license is increased in an effort to reduce the number of hunters.
(C) A law is passed increasing the price of cigarettes in an effort to decrease secondhand smoke.

Answer 1

Answer:

The answers that apply are:

(B) The price for a hunting license is increased in an effort to reduce the number of hunters.

(C) A law is passed increasing the price of cigarettes in an effort to decrease secondhand smoke.

Explanation:

Hunting is a practice that governments are trying to control and decrease.  So if government want to decrease the amount of people hunting they should increase the price of the licence.

Smoking is unhealthy,  so the law increase the price for healthy reasons.