Multiple Choice
(Figure: A Competitive Market in the Presence of Externalities) Use Figure: A Competitive Market in the Presence of Externalities. Given the figure, if there are external costs:
A) resources will be under allocated to the production of the good.
B) resources will be over allocated to the production of the good.
C) resources will be efficiently allocated to the production of the good.
D) the price at P will be higher than if there were no external costs.
Correct Answer:
Verified
Correct Answer:
Verified
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