When the Production of a Good Has a Marginal External

question 73

Multiple Choice

When the production of a good has a marginal external cost,which of the following occurs in an unregulated market?
i.Overproduction relative to the efficient level will occur.
ii.The market price is less than the marginal social cost at the equilibrium quantity.
iii.A deadweight loss occurs.

• A) i only
• B) ii only
• C) iii only
• D) i and ii
• E) i, ii, and iii

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