In a Competitive Market,a Negative Externality Creates a Deadweight Loss

question 113

Multiple Choice

In a competitive market,a negative externality creates a deadweight loss because

• A) the cost of the externality is double counted.
• B) a harm is generated.
• C) price equals social marginal cost.
• D) price equals private marginal cost.

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Definitions:

\(C ( x )\)

Commonly represents a function of x in mathematics, indicating the cost, capacity, or another quantity varying with x.

Domain

The set of all possible input values (usually x-values) for which a function or relation is defined.

Range

The difference between the highest and lowest values in a set; or in functions, the set of all possible output values.

\(g ( x )\)

A function notation similar to \(f ( x )\), where \(g\) represents another function with the variable \(x\).