When externalities are present in market activity and production occurs at P = MC,
a. the market generates an optimal distribution of resources
b. the market does not generate an optimal distribution of resources
c. a free-rider condition always raises price
d. P = ATC as well
e. the firm suffers economic losses
B
Economics
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Which of the following is true of a competitive price-searcher firm when the market is in a long-run equilibrium?
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