When external diseconomies exist
A) the true demand curve is to the right of the market demand curve.
B) the actual market equilibrium price is too high from society's perspective.
C)the supply curve slopes downward to the right.
D) industry output is less than socially optimal.
E) the supply curve reflecting the social costs is to the left of the industry supply curve.

Question

Quizplus · Accepted Answer

External diseconomies mean that the social costs are higher than the private costs, shifting the supply curve reflecting social costs to the left of the industry supply curve.

When External Diseconomies Exist