Suppose that the production of oranges reduces global warming. The equilibrium price of oranges is _______ because not all of the _________ are accounted for in the marketplace.
A)too high; benefits
B)too low; benefits
C)too low; costs
D)optimal; costs

Question

Quizplus · Accepted Answer

If the production of oranges reduces global warming, it means there are benefits to society that are not accounted for in the market price of oranges. Therefore, the equilibrium price of oranges is too low, as the market price does not reflect the full value of the oranges to society.

Suppose That the Production of Oranges Reduces Global Warming