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When a Production Externality Has a Beneficial Effect on a Bystander

Question 120

Multiple Choice

When a production externality has a beneficial effect on a bystander at the market equilibrium:


A) society is unlikely to benefit from production subsidies
B) the social cost of production is less than the private cost
C) the private benefit from consumption is less than the social cost of production
D) none of the above is true

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