Suppose External Costs Are Present in a Market Which Results

question 60

Multiple Choice

Suppose external costs are present in a market which results in the actual market price of $70 and market output of 150 units. How does this outcome compare to the efficient, ideal equilibrium?

• A) The efficient price would be higher than $70.
• B) The efficient price would be lower than $70.
• C) The efficient price would also be $70.
• D) The efficient output would be greater than 150 units.

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