FIGURE 16-1 -Refer to Figure 16-1.Suppose That the Perfectly Competitive Market with Market

question 35

Multiple Choice

FIGURE 16-1
-Refer to Figure 16-1.Suppose that the perfectly competitive market with no government intervention achieves equilibrium at point A.If the social marginal costs and social marginal benefits are represented by MC₁ and MB₀,respectively,then there exists

• A)a negative external benefit.
• B)a negative external cost.
• C)a positive external benefit.
• D)a positive external cost.
• E)no externalities at all.

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Definitions:

Interpret

To explain or provide the meaning of something, often used in the context of translating legal texts, artworks, or other complex materials.

Void

A term referring to a contract or legal obligation that is deemed invalid or unenforceable.

Consideration

In contract law, it refers to something of value exchanged between parties, which is necessary for the formation of a legally binding contract.

Sued

The action of bringing a lawsuit against an individual or entity, claiming wrongdoing or seeking remedies under law.