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The Greater the Magnitude of the External Costs of Production

Question 138

Multiple Choice

The greater the magnitude of the external costs of production,


A) ​The larger is the deadweight loss from overproduction.
B) ​The greater would be the optimal pollution tax.
C) ​The further the private market solution ignoring those costs would deviate from the socially efficient level of output.
D) ​All of the above are true.

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