Use the Following to Answer Questions

question 62

Multiple Choice

Use the following to answer questions:
Figure: Model of a Competitive Market
-(Figure: Model of a Competitive Market) Given the figure Model of a Competitive Market, if there are external costs:

• A) resources will be underallocated to the production of the good.
• B) resources will be overallocated to the production of the good.
• C) resources will be efficiently allocated to the production of the good.
• D) the price at P will be higher than if there were no external costs.

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Definitions:

Inexpensive Energy

Energy sources that are affordable in cost, often due to technological advancements, efficiency improvements, or subsidies.

Pharmaceutical Companies

Businesses involved in the research, development, production, and marketing of drugs and medications for medical use.

Automobile Manufacturers

Companies engaged in designing, producing, and selling motor vehicles.

Dry Cleaners

A business that cleans clothing, textiles, and garments using a chemical solvent rather than water, often for items that cannot withstand the rigors of standard home laundering.