Multiple Choice
Use the following to answer question:
Figure: Correcting for Market Failure
-(Figure: Correcting for Market Failure) Use Figure: Correcting for Market Failure.There is an external cost in the market illustrated in the figure,and the two upward-sloping lines reflect private and social marginal costs.If the government forces the private-sector firms to internalize any external costs:
A) the supply curve shifts to the right,from S2 to S1.
B) the supply curve shifts to the left,from S1 to S2.
C) the supply curve is unaffected.
D) price per unit decreases.
Correct Answer:

Verified
Correct Answer:
Verified
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