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Why does the presence of negative externalities lead to a misallocation of societal resources? 1)because whenever external costs are imposed on outside parties, the good

Why does the presence of negative externalities lead to a misallocation of societal resources?

1)because whenever external costs are imposed on outside parties, the good should NOT be produced at all

2)because the government always intervenes in markets when negative externalities are present

3)because less of the good is produced than is ideal for society

4)because the producer fails to take into consideration some costs associated with production

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