All of the following statements are true except ________.
A)an externality is a cost or a benefit that affects someone other than the seller or the buyer of a good
B)when an electric utility does not consider the cost of pollution when it decides how much power to produce, the result is overproduction
C)an electric utility creates an external cost by burning coal
D)all externalities create overproduction
E)an external cost creates overproduction

Question

Quizplus · Accepted Answer

Not all externalities create overproduction. Externalities can also cause underproduction, or result in an efficient production level.

All of the Following Statements Are True Except ________