The basic reason that a competitive unregulated market produces an inefficient amount of a good with an external cost is because
A) producers cannot measure marginal social cost.
B) producers do not pay the external cost.
C) the general public does not care about external costs.
D) external costs are not a political issue.
E) the external cost is paid by consumers rather than producers.
B
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The interest rate that the Fed charges banks for borrowing funds is called the federal funds rate
a. True b. False Indicate whether the statement is true or false
According to the new Keynesians:
a. prices adjust to equate demand and supply in every market simultaneously. b. random variations in the money supply are the original source of economic fluctuations. c. unemployment is voluntary. d. aggregate supply shocks can be a prime source of economic instability. e. government policy cannot stabilize the economy.