If a market generates a negative externality, the social cost curve is above the supply curve (private cost curve).

Name: If a market generates a negative externality, the social cost curve is above the supply curve (private cost curve).
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Quizplus · Accepted Answer

This is correct because a negative externality is a cost that is not accounted for by the seller and is instead borne by society. Therefore, the social cost is higher than the private cost, which is reflected in the social cost curve being above the supply curve.

If a Market Generates a Negative Externality, the Social Cost