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Which of the Following Statements Is True

Question 43

Multiple Choice

Which of the following statements is true?


A) When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will certainly be for the worse.
B) When production of a good yields negative externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount greater than costs will increase.
C) When production of a good yields positive externalities but output is currently at the market level, then a change in output to the socially optimal level will cause benefits to increase by an amount less than costs will increase.
D) a, b, and c
E) none of the above

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