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Market Failure End of Chapter Problem - Goods that produce negative externalities are priced lower than is socially ideal. However, goods that produce positive externalities
Market Failure End of Chapter Problem - Goods that produce negative externalities are priced lower than is socially ideal. However, goods that produce positive externalities are also priced lower than is socially ideal. This apparent paradox reflects the fact that the prices of goods that produce negative externalities don't include while the prices of goods that produce positive externalities don't include external costs suffered by third parties any costs and only benefits external benefits enjoyed by third parties
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