Consider a Market Where Production of a Good Generates a Negative

question 124

Multiple Choice

Consider a market where production of a good generates a negative externality.In the market equilibrium:

• A) too much of the good is being produced.
• B) too little of the good is being produced.
• C) there is usually little that can be done to correct the externality.
• D) the external costs have been internalized.
• E) firms are not maximizing profit.