In a Market Where Negative Externalities Are Associated with Consumption

question 223

Multiple Choice

In a market where negative externalities are associated with consumption and production, the equilibrium will not be efficient because

• A)too few resources will be allocated toward producing the good.
• B)firms will shut down until costs are reduced.
• C)costs of production will, on average, be too high.
• D)too many resources will be allocated toward producing the good.

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