Externalities cause the market mechanism to allocate goods and resources inefficiently because
A) nonconsenting third parties are generally not hurt by externalities.
B) producers and consumers ignore signals given by the competitive market.
C) prices are always higher than they should be.
D) competitive markets fail to give producers and consumers correct price signals.
Correct Answer:
Verified
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A) actual market
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Q117: Markets fail when externalities are present
A) because
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