Private markets fail to reach a socially optimal equilibrium when negative externalities are present because
a. social costs equal private costs at the private market solution.
b. private costs exceed social costs at the private market solution.
c. social costs exceed private costs at the private market solution.
d. they internalize externalities.
c
You might also like to view...
A price ceiling is only effective if it is above the market equilibrium.
Answer the following statement true (T) or false (F)
Which of the following is true?
A) At full employment, aggregate supply is equal to potential GDP. B) Aggregate supply is another name for potential GDP. C) Potential GDP decreases as the price level increases. D) The potential GDP line has a negative slope. E) Potential GDP increases as the price level increases.
Which is NOT a characteristic of monopolistic competition?
A) small share of market to each firm B) lack of collusion among firms C) few firms in the industry D) independence of each firm's decisions
From 1700-1780, the colonial population increased at a rate of approximately 3 percent per year. This rapid population growth was primarily due to
a. immigration from England. b. immigration from central Europe. c. higher birth rates in the colonies than in Europe. d. importation of slaves from Africa.