Asked by DANTE ANDERSON on Jun 26, 2024
Verified
Activities that generate external costs will likely be carried out at levels that _____ those that would be efficient.
A) are equal to
B) are less than
C) exceed
D) compete with
External Costs
Costs that are not reflected in the market price of goods or services, often borne by society.
Efficient
Describes a system or process that operates in a way that maximizes productivity or output with minimal waste or expense.
- Envision the consequences that external costs have on the functionality of markets.
Verified Answer
ST
Steve TorresJun 29, 2024
Final Answer :
C
Explanation :
Activities that generate external costs have costs that are not reflected in the market price, hence the individuals or firms carrying out the activity do not bear the full cost. This means they will carry out the activity at levels that exceed the efficient level, as they do not have to take into account the external costs.
Learning Objectives
- Envision the consequences that external costs have on the functionality of markets.
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