For a Good Whose Production Creates an External Cost, the Efficient

question 62

Multiple Choice

For a good whose production creates an external cost, the efficient quantity of output is

• A) where the market demand curve and the market supply curve intersect.
• B) zero.
• C) where the marginal social cost curve and marginal benefit curve intersect.
• D) the amount of production so that the marginal social benefit exceeds the marginal social cost by as much as possible.
• E) as low as possible.

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