Suppose the production of a good results in positive externalities. If output occurs at the intersection of the supply curve and the marginal social benefits curve, then
A. the socially optimal level of output will be produced.
B. society will incur a net social cost.
C. society will want less produced, and producers will be willing to satisfy that desire.
D. there is market failure.
Answer: A
You might also like to view...
Market failure: A case in which the __________ of govt intervention causes too much/not enough of a good to be produced at a ______ which is not ________________
Fill in the blank(s) with the appropriate word(s).
Under which of the following market conditions is it most difficult to maintain a cartel agreement?
a. There are many firms in the industry and these firms have similar costs. b. There are many firms in the industry and these firms have different costs. c. There are few firms in the industry and these firms have similar costs. d. There are few firms in the industry and these firms have different costs. e. There are many firms in the industry and these firms produce homogeneous products.