For a production process that involves a positive externality, it is true that
A) marginal social cost is more than marginal private cost.
B) a per unit tax could be imposed on the producer to achieve the socially optimal level of production.
C) a subsidy to producers could increase production to the socially optimal level.
D) marginal social benefit is less than marginal private benefit.
E) without government intervention the market will produce too much of this good.
Correct Answer:
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