The inclusion of both external costs and external benefits will cause a good's equilibrium price to be?
جب کسی شے میں بیرونی لاگت اور بیرونی فوائد دونوں شامل کیے جائیں تو اس کی توازنی قیمت پر کیا اثر پڑتا ہے؟
- The same, and its equilibrium quantity will be larger
- Higher than it otherwise would have been
- Lower than it otherwise would have been
- None of the above
Explanation
- When both external costs and external benefits are included, we move from private to social equilibrium.
- External costs raise the true cost, while external benefits increase the true value of the good.
- Considering both effects leads to a higher socially efficient price compared to the market price.
- Thus, the equilibrium price becomes higher than before.
Last verified on 23-04-2026
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