Multiple Choice
Suppose that the market price of good X equals the firm's cost of producing that good, but it does not reflect any costs imposed on society. Which of the following is FALSE?
A) The good is priced too low.
B) An external benefit is associated with good X.
C) Resources are over-allocated in the production of good X.
D) Too much of good X is being produced.
Correct Answer:
Verified
Correct Answer:
Verified
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