When there is a negative externality, the private cost of production ________ the social cost of production.
A) is greater than
B) is equal to
C) eliminates
D) is less than

Question

Quizplus · Accepted Answer

A negative externality occurs when the production or consumption of a good causes a harmful effect to a third party, leading to a situation where the social cost of production is greater than the private cost.

When There Is a Negative Externality, the Private Cost of Production