1) Livestock farmers frequently give antibiotics to their herds. The antibiotics create drug-resistant bacteria, making them less effective. This harm future users of antibiotics who will be using less-effective drugs.

A. What is the nature of the market failure? Provide an explanation to strengthen your answer.

B. Explain whether livestock farmers are more likely to overuse or underuse antibiotics. Provide an explanation to strengthen your answer.

C. Which of the following statements is TRUE? Also, Provide an explanation to strengthen your answer

I.In the face of a positive externality, a perfectly competitive market produces less than the socially optimal quantity of output.

II.If vaccinations make an external marginal benefit, the marginal social benefit of vaccinations will always exceed their private marginal benefit.

III.In unregulated markets, negative externalities create deadweight losses, but positive externalities do not.

IV.In the face of a negative externality, a perfectly competitive market produces more than the socially optimal quantity of output.

A.I, II and IV are correct

B.III only is correct

C.I and III are correct

D.I and IV are correct