Asked by
Mafer De Los Santos
on Nov 25, 2024
Verified
If there are external benefits associated with the consumption of a good or service,
A) the market demand curve will overestimate the true demand curve.
B) the market demand curve will underestimate the true demand curve.
C) consumers are paying for all these benefits.
D) the market demand curve will be the vertical summation of the individual demand curves.
External Benefits
Positive effects experienced by third parties or the broader society as a result of an economic transaction or activity that are not reflected in market prices.
Market Demand Curve
A graphical representation showing the relationship between the price of a good and the total quantity demanded by all consumers in the market.
- Analyze the impact of external benefits and costs on market outcomes.
Verified Answer
KS
Learning Objectives
- Analyze the impact of external benefits and costs on market outcomes.
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