When a Positive Externality Generated from the Production of a Good

question 101

Multiple Choice

When a positive externality generated from the production of a good has not been internalized,then:

• A)the socially optimal quantity of output must be larger than the market level of output.
• B)the socially optimal quantity of output must be less than the market level of output.
• C)the socially optimal quantity of output must be equal to the market level of output.
• D)the socially optimal quantity of output can be either larger or smaller than the market level of output.