Question
S, Refer to the above diagram in which is the market supply curve and S, is a supply curve comprising all costs of production,
S, Refer to the above diagram in which is the market supply curve and S, is a supply curve comprising all costs of production, including external costs. Assume that the number of people affected by these external costs is large. Without government interference, this market will result in: A. an underallocation of resources to this product. B. an overallocation of resources to this product. C. an optimal allocation of society's resources. D. a higher price than is consistent with an optimal allocation of resources.
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Economics
Authors: R. Glenn Hubbard
6th edition
978-0134797731, 134797736, 978-0134106243
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