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If the Social Value of Producing a Good Is Always

Question 422

Multiple Choice

If the social value of producing a good is always higher than the private value of producing it, then there is a


A) negative externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity.
B) negative externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity.
C) positive externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity.
D) positive externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity.

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