Markets Fail When Externalities Are Present _____

question 142

Multiple Choice

Markets fail when externalities are present _____

• A)because all the costs and benefits of producing goods are reflected in the market prices of the goods.
• B)because some of the costs and benefits of producing goods are not reflected in the market prices of the goods.
• C)because monopoly power arises.
• D)because profits are not maximized.
• E)because there is underprovision of merit goods.

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Definitions:

Cash on Delivery (COD)

A transaction method where payment for goods is made at the time they are delivered rather than in advance.

Inspection Allowed

A provision in agreements that grants one party the right to examine goods, documents, or facilities before finalizing a transaction.

Conform

To act or be in accordance with established rules, standards, or laws.

Express Terms

Specific provisions and clauses explicitly stated in a contractual agreement or legal document.