-When Negative Externalities Exist in a Market, That Market Will

question 72

True/False

-When negative externalities exist in a market, that market will produce too little output compared to the socially efficient level of output.

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Definitions:

Total Costs

The total amount of expenses a business has for producing goods or services, encompassing both constant and fluctuating costs.

Elasticity of Demand

An indicator quantifying the impact of price movements on demand for a good.

Elasticity Coefficient

A measure of how much the quantity demanded or supplied of a good responds to a change in price, income, or another economic factor.

Resource Demand

The desire and ability of producers to acquire resources at various prices, which are necessary for production of goods and services.