Why does the presence of negative externalities in the production of a good lead to an overproduction of the good?
What will be an ideal response?
If the production of a good generates negative externalities, the marginal social cost of producing the good exceeds the marginal private cost of producing the good. However, the producers of the good do not take this external cost into account and continue producing as long as the marginal private benefit from production exceeds the marginal private cost. This leads to an overproduction of the good.
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When savings ratios in the United States are above 5 percent, the economy grows at a rate of less than 3 percent
Indicate whether the statement is true or false
Although highly unlikely in the real world, in a perfectly balanced oligopoly with eight firms, the market share of each firm is
a. 16.2 percent b. 14.0 percent c. 13.5 percent d. 12.5 percent e. 8.0 percent