If Production of a Good Creates External Benefits, a Competitive

question 45

Multiple Choice

If production of a good creates external benefits, a competitive market will likely produce

• A) less output than would maximize profit.
• B) more output than would maximize profit.
• C) less output than is efficient.
• D) more output than is efficient.

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Definitions:

Industry

A sector of the economy that produces a related set of goods or services.

Marginal Cost

The expense associated with the production of an extra unit of a product or service.

Marijuana

Refers to the dried leaves, flowers, stems, and seeds from the Cannabis sativa or Cannabis indica plant, used for medicinal or recreational purposes.

Shipment Seized

An event where goods are confiscated by authorities, usually due to regulatory, customs, or legal issues.