When a positive externality is present in a market,total surplus is:
A)lower when buyers only consider private costs.
B)higher when buyers only consider private costs.
C)lower when buyers consider social costs.
D)None of these statements is true.

Question

Quizplus · Accepted Answer

When a positive externality is present, the market fails to account for the additional benefits to society, leading to a lower total surplus when buyers only consider private costs.

When a Positive Externality Is Present in a Market,total Surplus