Business, 19.02.2020 00:53, DjPeaceQueen

Externalitiesa. Assume excessively large SUVs include spillover costs that are not borne by the initial consumer but rather society as a whole. Explain two negative externalities associated with SUVs. Who pays the external costs? Identify the current price and output and the socially optimal price and output.
Use MSB and MSC to explain if SUVs are being overallocated or underallocated by the free market. Explain why the free market failed? Explain what the government must do to fix this negative externality?

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Externalitiesa. Assume excessively large SUVs include spillover costs that are not borne by the init...