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Why are externalities considered a cause of market failure? O Because they lead to suboptimal outcomes. O Because decision makers become overly concerned about the impact of their actions on bystanders. O Because they always cause a net loss in welfare. O Because they make markets so competitive that profits disappear.

Why are externalities considered a cause of market failure? O Because they lead to suboptimal outcomes. O Because decision makers become overly concerned about the impact of their actions on bystanders. O Because they always cause a net loss in welfare. O Because they make markets so competitive that profits disappear.

Microeconomics A Contemporary Intro
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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Am. 112.

Why are externalities considered a cause of market failure? O Because they lead to suboptimal outcomes. O Because decision makers become overly concerned about the impact of their actions on bystanders. O Because they always cause a net loss in welfare. O Because they make markets so competitive that profits disappear.
Transcribed Image Text:Why are externalities considered a cause of market failure? O Because they lead to suboptimal outcomes. O Because decision makers become overly concerned about the impact of their actions on bystanders. O Because they always cause a net loss in welfare. O Because they make markets so competitive that profits disappear.
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