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If There Are No Externalities, a Competitive Market Achieves Economic

Question 89

Multiple Choice

If there are no externalities, a competitive market achieves economic efficiency.If there is a negative externality, economic efficiency will not be achieved because


A) too little of the good will be produced.
B) too much of the good will be produced.
C) a deadweight loss will occur that is equal to the area under the demand curve for the good.
D) economic surplus is maximised.

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