Use the Following to Answer Question(s): Correcting for Market Failure

question 79

Multiple Choice

Use the following to answer question(s) : Correcting for Market Failure: External Cost

-(Exhibit: Correcting for Market Failure: External Cost) Assume that there is an external cost involved, as illustrated in the exhibit.If the government intervenes to correct for the external cost, the new _______ will now reflect _______ and _______ cost.

• A) supply curve S₁; private; external
• B) supply curve S₂; private; no external
• C) supply curve S₂; private; external
• D) demand curve (not shown); external; no private

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