When a Positive Externality Exists, the Equilibrium Quantity That Emerges

question 181

Multiple Choice

When a positive externality exists, the equilibrium quantity that emerges from a competitive market is

• A)too high.
• B)too low.
• C)just right.
• D)sometimes too high and sometimes too low.
• E)zero.

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Definitions:

Hypothetical Reasoning

The cognitive process of thinking about situations that are not directly observed or real and exploring possible outcomes.

Inductive Reasoning

A method of reasoning in which specific observations or data are used to form a general conclusion or hypothesis.

Adolescent Egocentrism

is a characteristic of teenage thinking, which includes believing that one’s own experiences and feelings are unique and not understood by others.

Reciprocal Relationship

A mutual relationship in which parties exert influence on each other or benefit each other equally.