When Social Costs of Producing or Consuming a Good Exceed

question 110

Multiple Choice

When social costs of producing or consuming a good exceed private costs:

• A)a positive externality exists.
• B)an inefficiently high quantity of a good will be produced and consumed.
• C)the direct consumers of the good will bear the external costs.
• D)the individuals involved in the production of the good do not bear the private costs.
• E)the quantity of the good produced will be less than the socially efficient level.

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