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In which of the following situations would an unregulated market produce the allocatively efficient quantity of output?

A

A perfectly competitive industry is producing the profit-maximizing output, and consumer and producer surplus are maximized.

B

A monopoly is producing the profit-maximizing output in an industry with no externalities.

C

A perfectly competitive market is producing the profit-maximizing output of a product that creates positive externalities.

D

A monopolistically competitive industry is made up of firms that are producing the profit-maximizing output, and there is a wide variety of products available to consumers.

E

In an oligopolistic industry with no externalities, a cartel is formed to increase the firms' profits.

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