If Positive Externalities Exist and Production Is Left to the Private

question 43

Multiple Choice

If positive externalities exist and production is left to the private market, then at the quantity produced,

• A) MSC = MSB.
• B) MSC < MSB.
• C) MSC > MSB.
• D) MSB = marginal external benefit.
• E) MSB = 1/MSC.

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