Economics · Market Failure and Public Economics
Consider the following pairs regarding negative externalities and their correction: 1. Result of Negative Externality : Overproduction relative to the socially optimal level2. Optimal Pigouvian Tax : Set equal to the Marginal External Cost (MEC)3. Allocatively Efficient Point : Intersection of Marginal Private Cost (MPC) and Demand (MB) curves How many of the above pairs is/are correctly matched?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Two only✓
- 2None
- 3All three
- 4One only
Correct answer
Two only
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