Which Statement Is INCORRECT

question 116

Multiple Choice

Which statement is INCORRECT?

• A) When external benefits exist in a market, Q_market < Q_efficient.
• B) When external benefits exist in a market, social surplus is maximized when social benefits equal the marginal costs of production.
• C) When external costs exist in a market, Q_market > Q_efficient.
• D) Through taxation, government action can result in Q_market = Q_efficient.

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