As a result of a negative externality, the market equilibrium quantity is too ______ compared to...
Question:
As a result of a negative externality, the market equilibrium quantity is too compared to the socially optimal quantity. As a result of a positive externality, the market equilibrium quantity is too compared to the socially optimal quantity.
a. high; high.
b. low; low.
c. high; low.
d. low; high.
Market Equilibrium:
The term market equilibrium can be defined as the economic state determined from the intersection of the market demand and supply curves. This economic state helps to estimate both the equilibrium price and quantity.
Answer and Explanation: 1
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View this answer- The correct option is c. High; Low.
In case of negative externality, the third party suffered as a consequence of the economic transactions as the...
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Positive Externality: Definition & Examples
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Chapter 7 / Lesson 20
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Learn what a positive externality is and why such an externality arises. Learn from positive externality graphs of production and consumption externalities.
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