Question
Question 6 (1 point) If we assume that the production process of good X results in...
Question 6 (1 point) If we assume that the production process of good X results in a negative externality, then we can conclude that the market output level of X exceeds the socially optimal level of output. True False
Answers
True
Explanation: When there is a negative externality, social cost exceeds private cost. Therefore, the quantity produced is higher than the socially optimal level.
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