When Negative Externalities Exist, the Private Market Equilibrium Represents a

question 161

Multiple Choice

When negative externalities exist, the private market equilibrium represents a

• A) market price which is too low and a market quantity which is too low.
• B) market price which is too low and a market quantity which is too high.
• C) market price which is too high and a market quantity which is too low.
• D) market price which is too high and a market quantity which is too high.

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Definitions:

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.