Assume That Production of a Good Imposes External Costs on Others

question 217

Multiple Choice

Assume that production of a good imposes external costs on others. The equilibrium price will be ____ and the equilibrium quantity ____ for efficient resource allocation.

• A)​too high; too high.
• B)​too high; too low.
• C)​too low; too high.
• D)​too low, too low.

---

Definitions:

Republican Party

A major political party in the United States known for its conservative positions on economic and social issues.

Institutionalized Power

Power that is established, maintained, and recognized by societal norms and institutions, often embedded in laws, traditions, and organizational structures.

Legitimate Power

Authority that is recognized and accepted by others within an organizational or societal structure, often based on a person's role or position.

Public Opinion

The distribution of views, beliefs, or sentiments held by the general population regarding issues, policies, or actions.