In an unregulated competitive market, the presence of marginal external cost of a good or service results in overproduction

If a firm is a perfect competitor, then

A) the demand curve for its product is perfectly elastic. B) it can independently set the price of the product it sells without regard to what other firms in the market are doing. C) it is impossible for the firm to earn short-run economic profits. D) its marginal cost will exceed marginal revenue at the optimal level of output.

Suppose the U.S. price level rises 25 percent at a time when Japan experiences stable prices. As a result, the U.S. demand for Japanese goods will __________, and the Japanese demand for U.S. goods will __________; in turn, this will increase the demand for Japanese yen and decrease the supply of Japanese yen; in turn, the dollar will depreciate and the yen will appreciate

A) rise; fall B) fall; rise C) rise; rise, too D) fall; fall, too