Assume the Production of a Good Causes a Negative Externality

question 39

Multiple Choice

Assume the production of a good causes a negative externality. In the market equilibrium, the marginal consumer values the good at

• A)less than the social cost of producing it.
• B)less than the private cost of producing it.
• C)more than the social cost of producing it.
• D)more than the private cost of producing it.

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