Multiple Choice
Which of the following describes how a negative externality affects a competitive market?
A) The externality causes a difference between the private cost of production and the social cost.
B) The externality causes a difference between the private cost of production and the private benefit from consumption.
C) The externality causes consumer surplus to exceed producer surplus.
D) The externality causes a difference between the private cost of production and the equilibrium price.
Correct Answer:
Verified
Correct Answer:
Verified
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