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Suppose the Efficient Output Currently Prevails in the Market for Ice

Question 25

Multiple Choice

Suppose the efficient output currently prevails in the market for ice cream.A tax on ice cream con?sumption will:


A) allow efficiency to continue to prevail in the market.
B) result in more than the efficient output in the market.
C) result in less than the efficient output in the market.
D) cause the marginal social cost of ice cream to exceed its marginal social benefit at the market equilibrium output.

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