If the Production of a Good Generates a Detrimental Externality

question 193

Multiple Choice

If the production of a good generates a detrimental externality, then at that level of production of the good under perfect competition,

• A)MU = MSC.
• B)P < MPC.
• C)MPC < MSC.
• D)MPC > MSC.

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Definitions:

Expedia

An online travel agency that provides bookings for flights, hotels, car rentals, and vacation packages.

Disintermediation

The removal of intermediaries in a supply chain, allowing direct transactions between producers and consumers.

Channel Intermediaries

Organizations or individuals that act as middlemen in the distribution process, helping to move products from the producer to the final consumer.

Over-the-counter Products

Medications or goods that can be purchased without a prescription, directly from a retailer.