Asked by
Edita Alija
on Nov 25, 2024
Verified
In a free-market economy, a product which entails a positive externality will be
A) overproduced.
B) underproduced.
C) produced at the optimal level.
D) provided solely by the government.
Positive Externality
A benefit that affects a party who did not choose to incur that benefit, often associated with public goods and services.
Free-Market Economy
An economic system where prices are determined by unrestricted competition between privately owned businesses without government intervention.
- Explore the role of external incentives and expenditures in shaping market outcomes.
- Explain how subsidies, taxes, and regulatory measures affect economic welfare and market equilibrium.
Verified Answer
AT
Learning Objectives
- Explore the role of external incentives and expenditures in shaping market outcomes.
- Explain how subsidies, taxes, and regulatory measures affect economic welfare and market equilibrium.
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