In a free market where a firm's activity causes detrimental externalities,
A) marginal benefits will be less than marginal social costs.
B) smaller outputs than those that maximize profits will be socially desirable.
C) marginal social cost will be greater than marginal private cost.
D) All of the above are correct.
Correct Answer:
Verified
Q107: The Rand Corporation estimates that the external
Q108: Free market economies
A)often have dirty air and
Q109: The desirable level of output in a
Q109: Figure 15-2 Q110: If P = MC for all goods Q111: Where a firm generates beneficial externalities, society Q112: In the case of a beneficial externality Q114: Market economies have air and water pollution, Q115: Which of the following would be classified Q116: The former communist countries of eastern Europe
A)marginal
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