For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?
A) underproduction compared to the efficient level
B) overproduction compared to the efficient level
C) production equals the efficient level
D) Underproduction or overproduction are both possible depending on whether the external benefit is to consumption or production.
E) None of the above is correct.
A
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An economist left his $100,000-a-year teaching position to work full-time in his own consulting business. In the first year, he had total revenue of $200,000 and business expenses of $150,000 . He made a(n):
a. implicit profit. b. economic loss. c. economic profit. d. accounting loss but not an economic loss. e. zero economic profit.
In the long run in a monopolistically competitive industry,
a. economic profit will be positive b. the price will be driven to zero c. the firm will not operate where MR = MC d. economic profit will be zero e. the price will exceed average total cost