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    Exam 17: Externalities
  5. Question
    When the Production of a Good Creates an External Cost
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When the Production of a Good Creates an External Cost

Question 104

Question 104

Multiple Choice

When the production of a good creates an external cost, to achieve the efficient quantity governments can set taxes (T) such that


A) MSC = MC + T.
B) MC = MSC + T.
C) T = MC + MSC.
D) MSC = MC - T.

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