-Refer to the Diagram Above

question 156

Multiple Choice

-Refer to the diagram above.The reason the invisible hand does not allocate resources efficiently in the market is that

• A) there is too much demand.
• B) the private supply curve,S1,does not include the external cost of production.
• C) the social supply curve,S,includes the external cost of production.
• D) the private supply curve,S,does not include the external cost of production.
• E) equilibrium cannot be achieved.

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