When producing a good generates negative externalities,the private market for that good tends to produce too:
A) much of the product at too low a price.
B) much of the product at too high a price.
C) little of the product at too low a price.
D) little of the product at too high a price.

Question

Quizplus · Accepted Answer

Negative externalities lead to overproduction because producers do not bear the full cost of production, resulting in a lower market price than the socially optimal level.

When Producing a Good Generates Negative Externalities,the Private Market for That