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Jchanis15 Jchanis15
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Consider an industry producing good X. The quantity of good X produced in a competitive free market will be less than the socially optimal level if

▸ good X has negative third party effects associated with its consumption.

▸ the consumption of good X generates a positive externality.

▸ the production of good X generates a negative externality.

▸ the government is subsidizing the production of good X.

▸ the consumption of good X generates a negative externality.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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jp50jp50
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