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Consider a Competitive Market in Which the MPB = 180

Question 8

Multiple Choice

Consider a competitive market in which the MPB = 180 - 2q and the MSC = q.In this market, however, there is a positive consumption externality of $60 per unit consumed.What is the DWL that results in the market equilibrium?


A) $200
B) $600
C) $400
D) $500
E) $0

Correct Answer:

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