If the Production of a Good Generates a Negative Externality

question 91

Multiple Choice

If the production of a good generates a negative externality, then at the market equilibrium quantity, the marginal cost to society of another unit of the good will be:

• A)less than the marginal benefit of another unit.
• B)greater than the marginal benefit of another unit.
• C)equal to the marginal benefit of another unit.
• D)negative due to the external cost.

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Definitions:

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