Why do prices fail to represent the opportunity costs of resources when externalities exist?

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Public Finance A Contemporary Application Of Theory To Policy

ISBN: 9780538754460

10th Edition

Authors: David N Hyman

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Question Posted: Aug 11, 2023 04:15 AM

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Why do prices fail to represent the opportunity costs of resources when externalities exist?

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Prices in a market economy are often relied upon to allocate resources efficiently based on supply and demand However when externalities are present s...View the full answer

Public Finance A Contemporary Application Of Theory To Policy

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