In a free market,goods with negative externalities will A. be underproduced in t

Question

In a free market,goods with negative externalities will
A. be underproduced in themarket place
B. have the marginal valuationof the externality reflected in their price
C. be produced to the point atwhich the marginal social benefit equals the marginal social costof the last unit produced
D. be overproduced at themarket equilibrium
In a free market,goods with negative externalities will
A. be underproduced in themarket place
B. have the marginal valuationof the externality reflected in their price
C. be produced to the point atwhich the marginal social benefit equals the marginal social costof the last unit produced
D. be overproduced at themarket equilibrium

Explanation / Answer

(D) be overproduced at the Market Equilibrium (D) When they have monopoly power

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