When the Marginal Social Cost of the Production of Good

question 103

Multiple Choice

When the marginal social cost of the production of Good A is greater than the marginal private cost of the production of Good A,then

• A)a competitive,unregulated market produces less than the efficient quantity of Good A.
• B)a competitive,unregulated market produces the efficient quantity of Good A.
• C)a competitive,unregulated market produces more than the efficient quantity of Good A.
• D)the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.
• E)a competitive,unregulated market does not create a deadweight loss.

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