A positive externality will cause a market to produce
A)more than is socially desirable.
B)less than is socially desirable.
C)the socially optimal equilibrium amount.
D)more than the same market would produce in the presence of a negative externality.

Question

Quizplus · Accepted Answer

A positive externality results in a market producing less than is socially desirable because the benefits to society are greater than the benefits to the individual consumer, leading to underproduction.

A Positive Externality Will Cause a Market to Produce