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In the Presence of a Negative Externality

Question 63

Multiple Choice

In the presence of a negative externality


A) the market solution is efficient,but the market price is too high
B) the market price is efficient,but the corresponding quantity is inefficient
C) the market solution results in too little output being produced
D) the efficient outcome is determined where the marginal social cost and market demand curves intersect
E) the efficient outcome is determined where the marginal cost and market supply curves intersect

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