If the Demand Curve Fails to Capture All of the Benefits

question 139

Multiple Choice

If the demand curve fails to capture all of the benefits of consumption, then the:

• A)equilibrium price will be efficient but the equilibrium quantity will be inefficiently large.
• B)equilibrium price will be inefficiently low.
• C)government needs to impose regulations that require more consumption.
• D)equilibrium price will be inefficiently high.

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Definitions:

Valence

The value or importance an individual places on the expected outcome of a particular behavior or action.

Expectancy

The belief or anticipation regarding the outcome of one's efforts, which can significantly influence motivation and behavior.

Publicly

Pertains to anything done or existing in open view, accessible to all members of the community or targeted audience, often under public scrutiny.

Discomfort

A feeling of physical or emotional unease or discomfort, often leading to avoidance behavior or a desire for change.