When negative externalities exist in a market, equilibrium price will be less than the efficient output....
When negative externalities exist in a market,
equilibrium price will be less than the efficient output.
equilibrium output will be less than the efficient output.
equilibrium output will be greater than the efficient output.
equilibrium output will be greater than the efficient price
Homework Answers
Negative externalities create external Cost, so social marginal cost is higher than private marginal cost, resulting in (private) equilibrium output being greater than the (Socially) efficient output.
Option (3) is correct.
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When negative externalities exist in a market,
equilibrium price will be less than the efficient output....
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