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When a Production Quota Is Used to Remedy the Problem

Question 18

Multiple Choice

When a production quota is used to remedy the problem of the commons, then


A) the market equilibrium, but not the efficient outcome, is achieved.
B) the production quota is set so that use of the resource is where marginal social benefit equals marginal private cost.
C) all users of the resource have an incentive to cheat on the quota quantity.
D) the production quota is set so that use of the resource is where marginal private benefit equals marginal private cost.

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