Multiple Choice
On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?
A) The lack of a fireworks display in Yankeeville arises because of an externality.
B) The lack of a fireworks display in Yankeeville is a case of market failure.
C) In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient.
D) All of the above are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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