Suppose External Benefits Are Present in a Market Which Results

question 117

Multiple Choice

Suppose external benefits are present in a market which results in the actual market price of $62 and market output of 3,000 units. How does this outcome compare to the efficient, ideal equilibrium?

• A) The efficient price would be higher than $62.
• B) The efficient price would be lower than $62.
• C) The efficient price would also be $62.
• D) The efficient output would be less than 3,000 units.

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Definitions:

Exponentiation

The mathematical operation involving the raising of a number to the power of another number.

Mathematical Expression

A combination of numbers, operations, and symbols forming a meaningful equation or inequality.

Variable Substitution

The process of replacing a variable in an equation or expression with a specific value.

Exponentiation

A mathematical operation involving two numbers, the base and the exponent, where the base is multiplied by itself as many times as indicated by the exponent.