A negative externality will cause a private market to produce
A)less than is socially desirable.
B)more than is socially desirable.
C)exactly the quantity that is socially desirable.
D)less than the same market would produce in the presence of a positive externality.

Question

Quizplus · Accepted Answer

A negative externality leads to overproduction because the private market does not account for the external costs imposed on society, resulting in more production than is socially optimal.

A Negative Externality Will Cause a Private Market to Produce