If alcohol creates negative consumption externalities then the market equilibrium level of alcohol consumption will be:
A) less than is socially desirable
B) more than is socially desirable
C) more than is market optimal
D) less than is market optimal

Question

Quizplus · Accepted Answer

When alcohol consumption creates negative externalities, the social cost is higher than the private cost, leading to overconsumption compared to the socially optimal level.

If Alcohol Creates Negative Consumption Externalities Then the Market Equilibrium