If the Production of a Good Causes an External Cost

question 98

Multiple Choice

If the production of a good causes an external cost, then the efficient quantity is

• A) more than the quantity at which the marginal benefit equals the marginal cost.
• B) the quantity at which the marginal private benefit is greater than the marginal social benefit.
• C) equal to the quantity at which the marginal benefit equals the marginal cost.
• D) less than the quantity at which the marginal benefit equals the marginal cost.
• E) None of the above answers is correct.

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