Multiple Choice
A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account.A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.
-Refer to the above figures.An external cost exists.This will lead to a(n)
A) underproduction equal to minus
.
B) overproduction equal to minus
.
C) underproduction equal to minus
.
D) overproduction equal to minus
.
Correct Answer:
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