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MMLU / A negative externality in the market for a good exists when

Problem

Answer published by the source. Consult the official source to check your work against its answer.

question

A negative externality in the market for a good exists when

choices

  1. the market overallocates resources to the production of this good.
  2. spillover benefits are received by society.
  3. the marginal social benefit equals the marginal social cost.
  4. total welfare is maximized.

subject

high_school_microeconomics

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Source and history

Official source

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