With positive externalities in consumption,the market equilibrium quantity will be

Question

Quizplus · Accepted Answer

Positive externalities in consumption result in an underallocation of resources in the market. The market equilibrium quantity will be less than the socially optimal level because the demand curve only reflects private benefits and not the additional social benefits created. Therefore, the market equilibrium quantity will be less than the socially optimal level.

With Positive Externalities in Consumption,the Market Equilibrium Quantity Will Be