The market for a good that generates an external benefit is still considered efficient.

Name: The market for a good that generates an external benefit is still considered efficient.
Brand: Quizplus
Rating: 4.8 (48 reviews)

Question

Quizplus · Accepted Answer

The market for a good that generates an external benefit is not considered efficient because the price paid by consumers does not fully reflect the total social benefit of the good. As a result, there is an underallocation of resources towards the production of such goods, leading to a market failure.

The Market for a Good That Generates an External Benefit