In Markets with Positive Externalities,_____

question 157

Multiple Choice

In markets with positive externalities,_____

• A)the marginal social benefit from the good is less than the marginal social cost.
• B)the average social benefit is less than the average social cost.
• C)the property rights on the good have been well defined.
• D)private marginal benefits result in a quantity of the good that is less than socially optimal.
• E)private marginal benefits result in a quantity of the good that is more than socially optimal.

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Definitions:

Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for its product or service, regardless of demand differences.

Marginal Revenue

The additional income that an organization receives from selling one more unit of a good or service.

Output

The total amount of goods or services produced by a company, industry, or economy over a certain period.

Elastic Range

The segment of a demand curve where any change in price leads to a more than proportionate change in the quantity demanded.