The Market Failure of External Cost Is Most Likely to Result

question 139

Multiple Choice

The market failure of external cost is most likely to result if Peanuts 'R' Us:

• A) keeps secret a discovery that excessive consumption of peanut butter causes nearsightedness.
• B) discards broken peanut shells onto an adjacent recreational area in its production of peanut butter.
• C) is subject to performance standard regulations by the PBRC (Peanut Butter Regulatory Commission).
• D) develops a new peanut butter processing machine that enhances competition.

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