When There Is an Externality in a Market

question 214

Multiple Choice

When there is an externality in a market,

• A)the externality will move the market to an economically efficient equilibrium.
• B)the externality will cause the market price to be less than or greater than the equilibrium price.
• C)the government should use price controls to enable the market to reach equilibrium.
• D)government intervention may increase economic efficiency.

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