Multiple Choice
Which of these statements is TRUE in the case of externalities?
I. In the case of externalities, prices do not reflect the true cost or benefit of the product.
II. In the case of externalities, prices sometimes send the wrong signals about a market.
III. Externalities discourage new producers from entering the industry since the price always remains about the efficient price.
A) I and II only
B) I and III only
C) II and III only
D) I, II, and III
Correct Answer:
Verified
Correct Answer:
Verified
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