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Manufacturers use a greenhouse gas called nitrogen trifluoride to make televisions. Nitrogen trifluoride is considered harmful for the environment. Suppose the marginal external cost of
Manufacturers use a greenhouse gas called nitrogen trifluoride to make televisions. Nitrogen trifluoride is considered harmful for the environment. Suppose the marginal external cost of making televisions is $20 and the government imposes a corrective tax of $25 per television. With this new tax: a. not enough televisions will be produced. cross out b. the price will be below the marginal social cost. cross out c. the price will be below the marginal cost of production. d. the price will equal to the marginal cost of production
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