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Ierofanga [76]
3 years ago
8

Whenever the production of a good creates negative externalities, an unregulated market will result in:

Business
1 answer:
sp2606 [1]3 years ago
6 0

Answer:

Option (C) is correct.

Explanation:

In an unregulated market, negative externality results in a higher social marginal cost than the firm marginal cost because this market is not properly regulated by the government officials. Hence, these firms are not taking into account the effect of negative externalities in their cost.

We know that the consumer's decision is more offenly based on the point where the marginal cost is equal to the marginal benefit because they are not taking the impact of negative externalities.

If proper action is not taken by the government, negative externality will result in a market inefficiencies.

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So there should be the decision regarding selling price for the units that are completed, the selling price for the units that are partially completed and the cost i.e to be incurred for finishing the units

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