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Externalities: Social Benefits and Social Costs
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Problem 10
Externalities: Social Benefits and Social Costs
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7. Externalities / Externalities: Social Benefits and Social Costs / Problem 9
Problem 9
In a market with negative externalities, how does the marginal social cost curve affect the equilibrium price compared to the traditional supply curve?
A
The equilibrium price is irrelevant in this context.
B
The equilibrium price is higher when considering the marginal social cost curve.
C
The equilibrium price is lower when considering the marginal social cost curve.
D
The equilibrium price remains unchanged.
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