Suppose the Production of a Good Results in Negative Externalities

question 72

Multiple Choice

Suppose the production of a good results in negative externalities. If output is at the intersection of the demand curve and the marginal social cost curve, then

• A)the socially optimal level of output will be produced.
• B)society will incur a net social cost.
• C)society will want less output produced, and producers will be willing to satisfy this desire at a price that society deems acceptable.
• D)b and c

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Definitions:

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Physiological Factors

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