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Consider a market with a downward sloping demand. You find that the product this firm produces generates a negative externality. Under each of the following

Consider a market with a downward sloping demand. You find that the product this

firm produces generates a negative externality. Under each of the following conditions

explain if firm's profit maximizing quantity can be the socially efficient quantity level.

(a) The firm is in a perfectly competitive market.

(b) The firm is a monopoly and perfectly price discriminates.

(c) The firm is a single price monopoly.

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