Suppose That the Production of a Good Causes Positive Externalities

question 126

Multiple Choice

Suppose that the production of a good causes positive externalities. What will happen if the good is produced at the level at which the marginal private benefit curve meets the supply curve?

• A)The level of production will be socially desirable.
• B)The level of production will result in a net social cost.
• C)The level of production will result in a net social benefit.
• D)The producers will incur losses.
• E)There will be no buyers in the market.

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Definitions:

Types

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