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The Socially Optimal Level of Output of a Good with an Externality

Question 187

Multiple Choice

The socially optimal level of output of a good with an externality occurs when


A) the marginal private costs of production are equal to marginal private revenues
B) the firm maximizes its profits
C) the consumer maximizes his or her utility
D) the marginal social cost of production equals the marginal social benefit of the good
E) the firm is making a normal profit

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