If the Production of a Good Generates a Detrimental Externality

question 193

Multiple Choice

If the production of a good generates a detrimental externality, then at that level of production of the good under perfect competition,

• A)MU = MSC.
• B)P < MPC.
• C)MPC < MSC.
• D)MPC > MSC.

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Definitions:

Overall

Encompassing everything or in general; a term not specific to economics but often used to imply a holistic or comprehensive perspective.

Substantially

To a great or significant extent, often used to signify the importance, size, or degree of something.

Positive Trade Balance

A situation where the value of a country's exports exceeds the value of its imports, also known as a trade surplus.

Merchandise

Goods produced for the purpose of being sold, typically referred to in the context of retail sales and trade.