Suppose the firms in the chemical industry are allowed, free of charge, to dump harmful products into rivers. How will the price and output of the chemical products in a competitive market compare with their values under conditions of ideal economic efficiency?
A) The price would be too low, and the output would be too large.
B) The price would be too high, and the output would be too large.
C) The price would be too low, and the output would be too small.
D) The price would be too high, and the output would be too small.
Correct Answer:
Verified
Q127: Because of the free-rider problem,
A) competitive markets
Q128: A good for which it is impossible
Q129: When external costs are present in a
Q130: A good is considered to be a
Q131: What are the two distinguishing characteristics of
Q133: Students in a class are assigned to
Q134: Consider two goods--one that generates external costs
Q135: Suppose external costs are present in a
Q136: Consider two goods--one that generates external benefits
Q137: In a competitive market, if the production
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents