Exhibit 17-1 -If Technology Is Fixed,the Discrepancy Between the Private Equilibrium and Private

Multiple Choice

Exhibit 17-1
-If technology is fixed,the discrepancy between the private equilibrium and the efficient level of output in Exhibit 17-1 is best eliminated by

A) subsidizing the production of the good by $10 per unit
B) taxing the firm producing the good by $10 per unit
C) using a quota system to encourage production of at least 160 units of the good
D) using a quota system to restrict production of the good to no more than 160 units
E) letting the private market operate freely to determine output at equilibrium