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As Preferences for a Clean Environment Increases,the Socially Optimal Quantity

Question 44

Multiple Choice

As preferences for a clean environment increases,the socially optimal quantity of pollution will:


A) remain the same because it is not determined by preferences.
B) increase because of increasing opportunity costs.
C) decrease because the demand shift will generate a new social optimum.
D) either increase or decrease depending on whether that demand is reflected in new market prices.

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