When Production of a Good Results in an External Cost

question 5

Multiple Choice

When production of a good results in an external cost, the unregulated competitive market equilibrium is inefficient because

• A) MSC = MC.
• B) MSC = MSB.
• C) MSC > MSB.
• D) MSC < MSB.

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Definitions:

Africa Slave Trade

The transatlantic slave trade involved the transportation of enslaved African people, mainly to the Americas, from the 16th to the 19th century.

Religious Reformation

A movement in the 16th century that aimed at reforming the beliefs and practices of the Roman Catholic Church, leading to the creation of Protestant churches.

North America

A continent located in the Northern Hemisphere and mostly in the Western Hemisphere, comprising countries such as the United States, Canada, and Mexico.

Papal Mandates

Orders or commands issued by the Pope, the head of the Roman Catholic Church, concerning religious doctrine, practice, or governance.