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Exhibit 30-4 ​ Refer to Exhibit 30-4.  If a Negative Externality Exists, Then the Externality

Question 12

Multiple Choice

Exhibit 30-4 ​
Exhibit 30-4 ​ Refer to Exhibit 30-4.  If a negative externality exists, then the market ____________output by the amount ________________. A) overproduces; Q<sub>1</sub> B) underproduces; Q<sub>2</sub> C) overproduces; Q<sub>1</sub> - Q<sub>2</sub> D) underproduces; Q<sub>2</sub> - Q<sub>1</sub>
Refer to Exhibit 30-4.  If a negative externality exists, then the market ____________output by the amount ________________.


A) overproduces; Q1
B) underproduces; Q2
C) overproduces; Q1 - Q2
D) underproduces; Q2 - Q1

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