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A Subsidy to Firms Intended to Reduce Pollution in an Industry

Question 87

Multiple Choice

A subsidy to firms intended to reduce pollution in an industry would


A) shift the LRAC curve upward.
B) have the same impact on the firm as a tax.
C) likely drive some existing firms from the industry.
D) likely have the paradoxical effect of increasing pollution in the industry in the long run.

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