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If the Marginal Social Benefit of a City's Sewage System

Question 24

Multiple Choice

If the marginal social benefit of a city's sewage system is less than the marginal social cost, then the city will achieve an efficient use of resources if it


A) increases the sewage charge that the residents pay.
B) increases the capacity of the sewage system.
C) does not change the capacity of the sewage system.
D) decreases the capacity of the sewage system.

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