Markets Fail When Externalities Are Present _____

Multiple Choice

Markets fail when externalities are present _____

A) because all the costs and benefits of producing goods are reflected in the market prices of the goods.
B) because some of the costs and benefits of producing goods are not reflected in the market prices of the goods.
C) because monopoly power arises.
D) because profits are not maximized.
E) because there is underprovision of merit goods.