When there are external costs of production, such as when electric utilities burn coal, a competitive market will produce an inefficient level of output.

Name: When there are external costs of production, such as when electric utilities burn coal, a competitive market will produce an inefficient level of output.
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Question

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When external costs are present, the market fails to account for these costs, leading to overproduction and inefficiency as the social cost exceeds the private cost.

When There Are External Costs of Production, Such as When