CUET-PG 2023 Shift 2 Question 40: Market failure, externalities and public goods
Which of the following are correct in presence of negative externalities?
(A) Negative externalities lead to an inefficient allocation of resources.
(B) Marginal external cost curve is added vertically to the private marginal cost curve to yield the social marginal cost curve.
(C) The efficient level of output attained is more than the market equilibrium output.
(D) The intersection of the marginal social cost curve with the demand curve gives the efficient level of output
Choose the correct answer from the options given below:
Tap an option to check your answer.
Answer and worked solution
Checking your account…
Market failure, externalities and public goods has come up 114 times in 7 exams since 2006.
What this question tests
This question is on Externalities and the social optimum, part of Market failure, externalities and public goods in Microeconomics.
Costs or benefits that fall on others, and why the private and socially efficient outputs differ.
TestStop has 33 past-paper questions on this subtopic.
