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If a Good Is Produced by Firms That Generate External

Question 36

Multiple Choice

If a good is produced by firms that generate external costs, the price consumers pay


A) will be efficient as long as it equals the marginal costs of the firms.
B) will be too low.
C) will be too high because the consumers end up paying the costs instead of the firm.
D) will be the correct price, but the quantity sold of the good will be too large.

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