18. In the case of a negative externality, the producer will take into account only the
when deciding how much to produce. As a result, output will ______ its efficient
level and price will ______ its efficient level.
a. private costs; equal; lie below;
b. social costs; lie below; exceed;
c. private costs; lie below; exceed;
d. private costs; exceed; lie below;
e. social costs; exceed; lie below;
19. For a monopoly who maximizes his profit, its marginal revenue
a. is greater than price;
b. is equal to price;
c. is less than price;
d. is equal to marginal cost;
e. c. and d.
20. When the demand curve facing the monopolist is relatively elastic, the
a. difference between marginal revenue and marginal cost is relatively small;
b. difference between marginal revenue and price is relatively large;
c. difference between marginal revenue and price equals zero;
d. difference between marginal revenue and price is relatively small;
e. difference between marginal revenue and marginal cost is relatively large.