Suppose the Production of a Good Results in Negative Externalities

question 127

Multiple Choice

Suppose the production of a good results in negative externalities. If all costs are taken into account, then

• A)output will be at a lower level than if all costs are not taken into account.
• B)output will be at a lower level than the socially optimal level.
• C)the marginal private cost curve will lie above and to the left of the marginal social cost curve.
• D)a and b
• E)a, b, and c

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Definitions:

Long-Run Supply

A market's supply at a point where all inputs can be adjusted, considering factors like technology and resource availability, reflecting the time period in which firms can fully adjust to market conditions.

Rental Housing Regulations

Rules and laws designed to govern the rental market, protect tenants and landlords, and ensure safe, habitable living conditions in rental properties.

Urban Land

Urban land refers to land that is used or designated for use in cities or towns, and includes a range of uses from residential to commercial and industrial.

Long-Run Cost Function

A relationship that shows the lowest cost at which a firm can produce any given level of output in the long run, where all inputs are variable.