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Consider a Competitive Market with a MPB = 22 -

Question 1

Multiple Choice

Consider a competitive market with a MPB = 22 - q and a MPC = 10 +q.There is a negative production externality of e = q, where q is the level of output in the market.Which statement is true?


A) The DWL in the market outcome is $4.
B) The DWL in the market outcome is $16.
C) The DWL in the market outcome is $12.
D) The DWL in the market outcome is $8.
E) The DWL in the market outcome is $6.

Correct Answer:

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