When the Production of a Good Results in a Positive

question 475

Multiple Choice

When the production of a good results in a positive externality, the social value curve is

• A)below the demand curve, indicating that the total value to society is less than the private benefit.
• B)above the demand curve, indicating that the total value to society is greater than the private benefit.
• C)identical to the demand curve, indicating that the total cost to society is the equal to the private benefit.
• D)above the supply curve, indicating that the total cost to society exceeds the private cost.