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Which of the following statements is NOT true of external benefits?

A) External benefits lead to an underallocation of resources to the production of the good that has the external benefit.
B) External benefits lead to a price in the market that is too high.
C) External benefits lead to too few of the goods that have the external benefit being produced.
D) External benefits are a good thing for the allocation of resources because people are getting something at no cost.

Marked as best answer by SunVisitor

  • PhD Member
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D

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Thank you!