If, Due to Externalities, Marginal Social Costs Exceed Marginal Private

question 325

Multiple Choice

If, due to externalities, marginal social costs exceed marginal private costs at a particular quantity in the production of a good, then production of the good is

• A) greater than the socially efficient amount.
• B) less than the socially efficient amount.
• C) efficient as long as marginal private costs equal marginal social benefit.
• D) efficient as long as marginal private costs exceed marginal social benefit.

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