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When the Marginal Social Cost of the Production of Good

Question 60

Multiple Choice

When the marginal social cost of the production of Good A is greater than the marginal private cost of the production of Good A, then


A) a competitive, unregulated market produces less than the efficient quantity of Good A.
B) a competitive, unregulated market produces the efficient quantity of Good A.
C) a competitive, unregulated market produces more than the efficient quantity of Good A.
D) the government should levy a tax on the production of Good A that is equal to the horizontal distance between the two marginal cost curves.

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