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Refrigerator producers use CFC in production which has a number of external costs. Specifically, CFC destroys ozone in the atmosphere. Suppose the external cost is
Refrigerator producers use CFC in production which has a number of external costs. Specifically, CFC destroys ozone in the atmosphere. Suppose the external cost is $200 per refrigerator and the government levies a corrective tax of $400 per refrigerator. With this new tax: Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a not enough refrigerators will be produced. b the equilibrium price will be below the social cost. c the equilibrium price will be below the social benefit or value. d the equilibrium price will be below the private cost to produce refrigerators
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