.... Attainment of allocative efficiency in the market If the government interve

Q: Attainment of allocative efficiency in the market If the government interve

D.)) Production in the paper mills to decrease B.)) Can be solved without the need for government intervention

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Attainment of allocative efficiency in the market If the government intervenes and corrects the externality in the situation described above, we would expect: The output of the paper mills to increase The price of paper from the mills to decrease Production of the hydroelectric power plants to decrease Production in the paper mills to decrease According to the Coase Theorem, externality problems: Do not exist in reality, because all costs and benefits are internal Can be solved without the need for government intervention Can only be resolved by government action, through either taxes or subsidies Can never be resolved adequately

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D.)) Production in the paper mills to decrease

B.)) Can be solved without the need for government intervention

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