The Market Will _______________ a Good That Generates a Negative

question 29

Multiple Choice

The market will _______________ a good that generates a negative externality (and no concurrent positive externality) because the market will fail to voluntarily include the marginal _______________ in its calculations.

• A)underproduce; external benefits
• B)underproduce; social benefits
• C)overproduce; external benefits
• D)overproduce; external costs
• E)underproduce; external costs

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Definitions:

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