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. Which of the panels would be consistent with the situation in which external costs exist?
A) Panel 1
B) Panel 2
C) Panels 1 and 2
D) neither panel
Correct Answer:
Verified
Correct Answer:
Verified
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