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25 January, 18:58

Consider two goods - one that generates external benefits and another that generates external costs. The actual market outcome woulda. result in a price that is lower than the efficient price for both goods. b. result in a price that is higher than the efficient price for both goods. c. result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost. d. result in a price that is higher than the efficient price for the good with an external benefit and a price that is lower than the efficient price for the good with an external cost

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  1. 25 January, 21:29
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    c. result in a price that is lower than the efficient price for the good with an external benefit and a price that is higher than the efficient price for the good with an external cost.

    Explanation:

    As external benefits and costs, none of them are recognized in the price function of each market, this means that benefits nor cost are accounted for the price formation process
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