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Figure 13-4 Shows a Market with a Positive Externality

Question 9

Multiple Choice

Figure 13-4 shows a market with a positive externality. -Refer to Figure 13 -4. At the competitive market equilibrium, for the last unit produced, A) the size of the external cost is P<sub>n </sub><sub> </sub>-P<sub>o</sub>. B) the size of the external cost is P<sub>m</sub><sub> </sub>-P<sub>o</sub>. C) the size of the external benefit is P<sub>n </sub><sub> </sub>-P<sub>o</sub>. D) the size of the external benefit is P<sub>m</sub><sub> </sub>-P<sub>o</sub>. Figure 13-4 shows a market with a positive externality.
-Refer to Figure 13 -4. At the competitive market equilibrium, for the last unit produced,


A) the size of the external cost is Pn -Po.
B) the size of the external cost is Pm -Po.
C) the size of the external benefit is Pn -Po.
D) the size of the external benefit is Pm -Po.

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