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If a Negative Externality Prevails in a Competitive Market for Air

Question 36

Multiple Choice

If a negative externality prevails in a competitive market for air travel, then:


A) more than the efficient amount of annual air travel will be consumed in equilibrium.
B) less than the efficient amount of annual air travel will be consumed in equilibrium.
C) the marginal social cost of air travel will exceed its marginal social benefit in equilibrium.
D) both a and c
E) both b and c

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