Economics (AS & A Level) · May / June 2026 · Paper 31 · Question 1
9708Private costs and benefits, externalities and social costs and benefits
What causes a market to fail and produce more than the optimum output of an economic good?
- Athe creation of monopoly power
- Bthe presence of a negative externality
- Cthe presence of a positive externality
- Dthe presence of non-excludability
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Correct answer: B. the presence of a negative externality
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