In a Market Where Firms Are Able to Reduce Their

question 156

Multiple Choice

In a market where firms are able to reduce their private costs by shifting costs onto others, which of the following will not happen?

• A)​Inefficiencies will occur.
• B)​Negative externalities will be observed.
• C)​The market prices of products produced by firms will be too low relative to the social optimum.
• D)​Output of the good being produced will be too low.

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Definitions:

Price

The anticipated sum of money, necessitated, or allocated in payment for something.

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Tickets offering a level of service and comfort lower than first-class, often at a lower price.

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Tickets that allow access to the highest level of service and amenities available on commercial transportation, such as airlines and trains.