If a negative externality were present in a market,the social benefit curve would be:
A) above the private demand curve.
B) below the private demand curve.
C) the same as the private demand curve.
D) Cannot say without more information.

Question

Quizplus · Accepted Answer

A negative externality creates costs to society beyond the private costs incurred by producers and consumers in the market. This means that the social cost (including the external costs) will be greater than the private cost. As a result, the social benefit curve will be below the private demand curve, reflecting the reduced overall benefit to society.

If a Negative Externality Were Present in a Market,the Social