It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. If the government intervenes and corrects the externality in the situation described we would experts A) the supply of the output from the hydroelectric power plants decrease. B) the supply of the output from the hydroelectric power plants increase C) the demand for the output from the hydroelectric power plants decrease D) the demand for the output from the hydroelectric power plants increase
It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment. If the government intervenes and corrects the externality in the situation described we would experts A) the supply of the output from the hydroelectric power plants decrease. B) the supply of the output from the hydroelectric power plants increase C) the demand for the output from the hydroelectric power plants decrease D) the demand for the output from the hydroelectric power plants increase
Chapter19: Externalities And Public Goods
Section: Chapter Questions
Problem 19.9P
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It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. As a result, operators of hydroelectric power-generating plants downstream along the river find that they must clean up the river's water before it flows through their equipment.
If the government intervenes and corrects the externality in the situation described we would experts
A) the supply of the output from the hydroelectric power plants decrease.
B) the supply of the output from the hydroelectric power plants increase
C) the demand for the output from the hydroelectric power plants decrease
D) the demand for the output from the hydroelectric power plants increase
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