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
A) a negative external benefit.
B) a negative external cost.
C) a positive external benefit.
D) a positive external cost.
E) no externality whatsoever.

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
A) a negative external benefit. 
B) a negative external cost. 
C) a positive external benefit. 
D) a positive external cost. 
E) no externality whatsoever.

Quizplus · Accepted Answer

The Answer of  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
A) a negative external benefit. 
B) a negative external cost. 
C) a positive external benefit. 
D) a positive external cost. 
E) no externality whatsoever.

FIGURE 16-1 -Refer to Figure 16-1. Suppose the Perfectly Competitive Market with Market