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Suppose External Costs Are Present in a Market Which Results

Question 11

Multiple Choice

Suppose external costs are present in a market which results in the actual market price of $24 and market output of 325 units. How does this outcome compare to the efficient, ideal equilibrium?


A) The efficient outcome would be greater than 325 units.
B) The efficient outcome would be less than 325 units.
C) The efficient outcome would also be 325 units.
D) The efficient price would be less than $24.

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