When the benefits to society of using a product exceed the benefits to the user,then _____
A)the product should be strictly regulated.
B)the product should be taxed.
C)the product provides a positive externality.
D)the product is overproduced at the privately determined equilibrium.
E)the product provides a negative externality.

Question

Quizplus · Accepted Answer

When the benefits to society of using a product exceed the benefits to the user, it means that the product provides a positive externality. A positive externality means that there are benefits to society that are not fully reflected in the private consumption decision of the individual user. In this case, the product should not be strictly regulated or taxed, but rather encouraged as it is providing a broader benefit to society.

When the Benefits to Society of Using a Product Exceed