Which of the following statements is NOT true?
A) If the production of a good involves a negative externality, then the marginal external cost is greater than zero.
B) If the production of a good involves a negative externality, then the marginal social cost is greater than the marginal private cost.
C) If the production of a good involves a negative externality, then the equilibrium quantity with free markets is less than the socially optimal level.
D) If the production of a good involves a negative externality, then the free-market equilibrium creates a deadweight loss.
Correct Answer:
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