If production of an item results in negative external costs, then
A) the market price is below the socially preferred price that reflects the external costs.
B) the market price is above the socially preferred price that reflects the external costs.
C) market forces will always correct the problem.
D) the market quantity is too low from society's point of view.
A
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A. always falls ; increases B. always falls; decreases C. rises, falls, or remains the same; decreases D. does not change; does not change E. rises, falls, or remains the same; increases
Suppose a perfectly competitive market is in long-run equilibrium with a price of $12. Then there is a permanent increase in demand
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