Asked by
Tatum Hughes
on Dec 11, 2024
Verified
If production of a good creates external benefits, a competitive market will likely produce
A) less output than would maximize profit.
B) more output than would maximize profit.
C) less output than is efficient.
D) more output than is efficient.
External Benefits
Benefits of a good or service that are not captured by the market price and are received by third parties.
Competitive Market
A market structure characterized by many buyers and sellers, free entry and exit, and products that are similar but differentiated.
Maximize Profit
The goal of adjusting production or service levels to achieve the highest possible returns.
- Familiarize yourself with the fundamental strategies for resource allocation when external costs and benefits exist.
Verified Answer
SG
Learning Objectives
- Familiarize yourself with the fundamental strategies for resource allocation when external costs and benefits exist.