Refer to the figure below. This graph describes a good that:
A)generates positive externalities.
B)should be banned.
C)generates negative externalities.
D)the government should subsidize.

Name: Refer to the figure below. This graph describes a good that: A)generates positive externalities. B)should be banned. C)generates negative externalities. D)the government should subsidize.
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Question

Refer to the figure below. This graph describes a good that: 
A)generates positive externalities. 
B)should be banned. 
C)generates negative externalities. 
D)the government should subsidize.

Quizplus · Accepted Answer

The social MC is higher than the private MC indicating that the good generates negative externalities.

Refer to the Figure Below