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Identify a market for a good or service that does NOT cause an externality.

A. True
B. False

User Rod Lima
by
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1 Answer

4 votes

Final answer:

No, market demand curves do not reflect positive externalities. Hence, it is B) False.

Step-by-step explanation:

No, a market demand curve reflects only the private benefits of those who are consuming the product.

Positive externalities are benefits that spill over to third parties, creating social benefits that are not captured by a market demand curve.

User ArturFH
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8.5k points