If there is a negative production externality affecting a market (where the firm mistakenly tries to maximize profits by ignoring the externality) then in the equilibrium a.Not enough of the good is provided and the price is too low b. Too much of the good is provided and the price is too low c. Too much of the good is provided and the price is too high d. Not enough of the good is provided and the price is too high
If there is a negative production externality affecting a market (where the firm mistakenly tries to maximize profits by ignoring the externality) then in the equilibrium a.Not enough of the good is provided and the price is too low b. Too much of the good is provided and the price is too low c. Too much of the good is provided and the price is too high d. Not enough of the good is provided and the price is too high
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter17: Externalities And The Environment
Section: Chapter Questions
Problem 6QFR
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Question
If there is a negative production externality affecting a market (where the firm mistakenly tries to maximize profits by ignoring the externality) then in the equilibrium
a.Not enough of the good is provided and the
b. Too much of the good is provided and the price is too low
c. Too much of the good is provided and the price is too high
d. Not enough of the good is provided and the price is too high
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