Suppose that the XYZ industry produces a product that results in negative external costs to society. This information suggests that resources are under-allocated to the industry. the equilibrium market price of the product includes the external costs borne by society. resources are over-allocated to the industry. O at the market price, quantity demanded is less than quantity supplied.

Suppose that the XYZ industry produces a product that results in negative external costs to society. This information suggests that resources are under-allocated to the industry. the equilibrium market price of the product includes the external costs borne by society. resources are over-allocated to the industry. O at the market price, quantity demanded is less than quantity supplied.

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter5: Difficult Cases For The Market And The Role Of Government

Section: Chapter Questions

Problem 10CQ

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