One of the reasons why private markets produce less than the socially optimal level of goods that yield positive externalities is that
A) producers do not know that their goods yield positive externalities.
B) the market does not benefit from goods that yield positive externalities.
C) positive externalities are often unpriced.
D) those goods are usually taxed heavily.
E) prices are already too high and consumers refuse to pay more.

Question

Quizplus · Accepted Answer

Positive externalities are often unpriced, meaning that their value is not fully captured in the price of the product or service. This creates a market failure where producers do not have an incentive to produce the socially optimal level of goods that yield positive externalities because they do not receive the full benefit of their production.

One of the Reasons Why Private Markets Produce Less Than