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    Microeconomics Study Set 40
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    Exam 16: Externalities
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    Figure: City with Two Polluters
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Figure: City with Two Polluters

Question 1

Question 1

Multiple Choice

Figure: City with Two Polluters
(Figure: City with Two Polluters) Look at the figure City with Two Polluters.If the government does not intervene in the pollution market, equilibrium will occur where firm A produces ________ tons of pollution and firm B produces tons of
Pollution for a total of tons of pollution.


A) 2,000; 2,000; 4,000
B) 0; 1,000; 1,000
C) 1,000; 0; 1,000
D) 800; 1,400; 2,200

Correct Answer:

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