FIGURE 16- 1
-Refer to Figure 16- 1.Suppose the perfectly competitive market with no government intervention achieves equilibrium at point A.If the social marginal costs and social marginal benefits are represented by MC0 and MB0,respectively,then there exists

Question

FIGURE 16- 1 
-Refer to Figure 16- 1.Suppose the perfectly competitive market with no government intervention achieves equilibrium at point A.If the social marginal costs and social marginal benefits are represented by MC0 and MB0,respectively,then there exists

Quizplus · Accepted Answer

Since the equilibrium is achieved at point A without any government intervention, it indicates that there are no externalities present in the market. Therefore, neither negative nor positive external costs or benefits exist. Hence, option C is the correct choice.