For a Product with External Benefits That Is Produced in a Competitive

question 82

Multiple Choice

For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?

• A) Underproduction and overproduction are both possible depending on whether the external benefit is to consumption or production.
• B) There is overproduction compared to the efficient level.
• C) Production equals the efficient level.
• D) There is underproduction compared to the efficient level.
• E) None of the above is correct.

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