Multiple Choice
A shift from S₁ to S₂ reflects the change that happens when a negative externality is taken into account. A shift from D₁ to D₂ reflects the change that happens when a positive externality is taken into account.
-Refer to the above figures. Externalities exist in both panels. After correcting for the externalities the prices should be
A) P₁ and P₃.
B) P₁ and P₄.
C) P₂ and P₄.
D) P₂ and P₃.
Correct Answer:
Verified
Correct Answer:
Verified
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