1. A free market fails: (A) when marginal benefits equal marginal costs. (B) whenever there is no government intervention. (C) when there is government intervention. (D) when there is an external effect in either production, consumption, or both. (E) when social benefits equals private benefits.

1. A free market fails:
(A) when marginal benefits equal marginal costs.
(B) whenever there is no government intervention.
(C) when there is government intervention.
(D) when there is an external effect in either production, consumption, or both.
(E) when social benefits equals private benefits.

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6. Which of the following statements is correct? (A) If duopolists successfully collude, then their combined output will be equal to the output that would be observed if the market were a monopoly. (B) Although the logic of self-interest decreases a duopoly's price below the monopoly price, it does not push the duopolists to reach the competitive price. (C) Although the logic of self-interest increases a duopoly's level of output above the monopoly level, it does not push the duopolists to reach the competitive level. (D) All of the above are correct. (E) All of the above are incorrect.

1. A free market fails:
(A) when marginal benefits equal marginal costs.
(B) whenever there is no government intervention.
(C) when there is government intervention.
(D) when there is an external effect in either production, consumption, or both.
(E) when social benefits equals private benefits.

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