If too little of a good is being produced in the free market,the production of the good is likely to have a ________.
A) positive externality
B) negative externality
C) low per-unit cost of production
D) high opportunity cost of production

Question

Quizplus · Accepted Answer

A positive externality occurs when the production or consumption of a good or service generates benefits for others who are not directly involved in the transaction. If too little of a good is being produced, it suggests that not all the benefits of its production are being captured by the producer, leading to underproduction from a societal perspective.

If Too Little of a Good Is Being Produced in the Free