The result of external costs is that social demand is_______ than market demand, and the socially optimal quan?
|
10-13-2012, 10:11 AM
Post: #1
|
|||
|
|||
The result of external costs is that social demand is_______ than market demand, and the socially optimal quan?
A. Greater; less
B. Less; greater C. Greater; greater D. Less; less What's the answer for this? I got D as my answer but not sure about it. An explanation would be very much appreciated! thank you Ads |
|||
10-13-2012, 10:19 AM
Post: #2
|
|||
|
|||
D. Less; less
The existence of external costs implies that social costs are not factored into the price that consumers pay; the demand for the product for consumers is higher than that of society. This makes social demand less than market demand. The lower social demand would be at a quantity that is less than the higher market demand. Ads |
|||
« Next Oldest | Next Newest »
|
User(s) browsing this thread: 1 Guest(s)