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Loggers are much likely to supply wood to the market if property rights are enforced. In the presence of market failures, public policy can improve economic efficiency. Classify the source of market failure in each case listed.
a. A person smoking in a restaurant emits second-hand smoke that harms other restaurant patrons.
b. A single public utilities company is responsible for supplying electricity for an entire state.
c. As a result, the utilities company can set the price of electricity.
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Loggers are much likely to supply wood to the market if property rights are enforced. In the presenc...
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