Which of the Following Is True Concerning Negative Externalities

question 82

Multiple Choice

Which of the following is true concerning negative externalities?

• A) Firms tend to produce more than the efficient level of output.
• B) Society gains because firms do not pay the external costs of production.
• C) Perfect competition is better than monopoly from the viewpoint of society even in the presence of negative externalities.
• D) With negative externalities, a monopoly will always produce an output level less than is socially efficient.

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Definitions:

Double-Blind

A study or clinical trial design in which neither the participants nor the experimenters know who is receiving a particular treatment, to prevent bias.

Experimental Study

A research methodology that assesses the cause-and-effect relationship between manipulated independent variables and measured dependent variables in a controlled environment.

Treatment

Methods or interventions, including medication, surgery, or therapy, designed to manage or cure medical or psychological conditions.

Internal Validity

The extent to which a study can rule out alternative explanations for its findings, ensuring that the results are due to the manipulated variables.