Oftentimes, the Socially Optimal Quantity for a Product That Imposes

question 169

Multiple Choice

Oftentimes, the socially optimal quantity for a product that imposes external costs on the society is not zero, but something greater than zero. This is because completely eliminating the externality would involve

• A)a much greater marginal benefit than marginal cost.
• B)a much greater marginal cost than marginal benefit.
• C)having shortages in the market.
• D)having surpluses in the market.

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