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Suppose That Water Pollution Creates a Negative Production Externality on a Local

Question 176

Multiple Choice

Suppose that water pollution creates a negative production externality on a local fishing firm. This means:


A) the fishing firm will catch as less fish than before at the same cost
B) it will be socially optimal for the water pollution to be eliminated
C) it will be socially optimal to do nothing about the water pollution
D) the fishing firm will catch more fish than before at the same cost

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