The greater the magnitude of the external benefits of production,
a. The larger is the deadweight loss from underproduction
b. The greater would be the optimal subsidy.
c. The further the private market solution ignoring those benefits would deviate from the socially efficient level of output.
d. All of the above are true
d
Economics
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A study conducted by a research firm revealed that RiteCure Health Insurance charges higher premiums than most of its rivals. The study also revealed that unlike its rivals, 60% of RiteCure's customers have chronic illnesses
a) What is the link between these two findings? b) What is likely to happen if the premium continues to rise?
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