Suppose that the market price of good A equals the firm's cost of producing that good, but it does not reflect any costs imposed on society. Which of the following is FALSE?
A) The good is priced too low.
B) An external benefit is associated with good A.
C) Resources are over-allocated in the production of good A.
D) Too much of good A is being produced.
Correct Answer:
Verified
Q23: A result of a positive externality in
Q24: Suppose that one firm produces a product
Q25: Which of the following is an example
Q26: An external cost, such as the cost
Q27: When a good causes positive external benefits
Q29: A negative externality is a situation in
Q30: When an external cost exists in the
Q31: An example of third parties in the
Q32: An externality can best be defined as
A)
Q33: If production of an item results in
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