Positive externalities
A)result in a larger than efficient equilibrium quantity.
B)result in smaller than efficient equilibrium quantity.
C)result in an efficient equilibrium quantity.
D)can be internalized with a corrective tax.

Question

Quizplus · Accepted Answer

Positive externalities result in a smaller than efficient equilibrium quantity because the social benefits exceed the private benefits, leading to underproduction in a free market.

Positive Externalities