Suppose the actions of the producers of a good generate an external benefit which results in the actual market price of $30 and market output of 220 units. How does this outcome compare to the efficient, ideal equilibrium?
A) The efficient price would higher than $30 while the efficient output would be less than 220 units.
B) The efficient price would be higher than $30 while the efficient output would be greater than 220 units.
C) The efficient price would be lower than $30 while the efficient output would be less than 220 units.
D) The efficient price would be lower than $30 while the efficient output would be greater than 220 units.

Question

Quizplus · Accepted Answer

When there is an external benefit, the efficient outcome requires a higher price and greater output to account for the positive externalities, leading to a higher social value.

Suppose the Actions of the Producers of a Good Generate