The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity of ________ units is inefficient because ________
A) 8; marginal benefit exceeds marginal cost
B) 8; marginal cost exceeds marginal benefit
C) 10; marginal cost exceeds marginal benefit
D) 10; marginal social benefit exceeds marginal benefit
E) 10; marginal external benefit exceeds marginal social benefit
A
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