In a Competitive Market, If the Production Process Involves an External

question 33

Multiple Choice

In a competitive market, if the production process involves an external cost, such as pollution of the environment, the market will

• A) produce the economically efficient outcome.
• B) result in a market price that is higher than the efficient one.
• C) register a price that is lower than the efficient one.
• D) result in too little of the good being produced compared to the ideal efficient outcome.

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Definitions:

Histogram

A graphical representation of the distribution of numerical data, where the data is grouped into bins and the frequency of data points within each bin is depicted by the height of the bar.

Intervals

Ranges or spans between two values, often used in contexts of measurement, time, or statistical analysis.

Overlap

The extent to which two or more things cover the same area or share common elements.

Frequency Distribution

A statistical analysis that shows how often each different value in a set of data occurs.