alleryStart learning →Requiring a firm to pay 100 dollars for external pollution costs per refrigerator makes the supply curve:
ABecome perfectly flat
BBecome perfectly vertical
CShift up by 100 dollars
DShift down by 100 dollars
Answer & Solution
Correct answer: C. Shift up by 100 dollars
1. Adding a per-unit cost moves the whole supply curve.
2. The firm may be required to pay 100 dollars for the additional external costs each time.
3. Production then becomes more costly.
4. The entire supply curve shifts up by 100 dollars.
_Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_
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