Question
The private marginal cost for a factory that produces widgets in dollars is PMC = 2Q. The private marginal benefit of consumers of widgets in
The private marginal cost for a factory that produces widgets in dollars is PMC = 2Q. The private marginal benefit of consumers of widgets in dollars is PMB = 120 -Q. Unfortunately, production of widgets involves emission of pollution. That pollution causes a cost to nearby residents of $30 per widget produced. Which of the following isnotcorrect?
Group of answer choices
To achieve the socially optimal outcome the government could require that output must not exceed 40 widgets.
To achieve a socially optimal outcome the government could require that production of widgets be no more than 30.
To achieve a socially optimal outcome the government could impose a per unit tax on widgets of $30.
Assigning property rights over the air into which the pollution is emitted to the nearby residents can achieve a socially optimal outcome.
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