Facebook is a monopolist. Assume that their marginal cost cu…

Facebook is a monopolist. Assume that their marginal cost curve shifts up, but that their demand curve remains the same and that Facebook does not shut down. Compared to before the increase in Facebook’s marginal cost, Facebook will ___[a]___ its price and ___[b]___ its level of production.

When the Madison city council intends to enact new policies…

When the Madison city council intends to enact new policies to address externalities due to pollution, they have the option to adopt command-and-control polices or market-based policies. When correcting for an externality, command-and-control policies are always preferable to market-based policies.