Economics 9708 · AS & A Level · 7.4

7.4 — practice question

When a good creates external benefits and is produced in monopolistic competition, which statement must be correct?

  • AOutput of the good is at the socially optimum level.
  • BOutput of the good is above the socially optimum level.
  • CPrivate costs exceed social benefits.
  • DSocial benefits exceed private benefits.

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