The similarity between markets for common resources and markets with externalities is that:
A. generally we get an oversupply at market.
B. the price that competitive firms charge does not capture the true costs and benefits of consumption.
C. the equilibrium quantity is too high in terms of society.
D. government involvement is needed to reach an efficient outcome.
Answer: B
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A. 1, 4 B. 1, 2 C. 1/2, 2 D. 1/2, 4
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