Suppose the Production of a Good Results in Positive Externalities

question 168

Multiple Choice

Suppose the production of a good results in positive externalities. If output occurs at the intersection of the supply curve and the marginal social benefits curve, then

• A)the socially optimal level of output will be produced.
• B)society will incur a net social cost.
• C)society will want less produced, and producers will be willing to satisfy that desire.
• D)there is market failure.