Betsy loves to garden, and her rose garden is enjoyed by everyone in her neighborhood.Because her consumption of rosebushes provides a positive externality to the community, at the market equilibrium quantity, the marginal social:

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Betsy's consumption of rosebushes provides a positive externality to the community because her rose garden is enjoyed by everyone in the neighborhood. At the market equilibrium quantity, the marginal private benefit of the rosebushes is equal to the market price, but the marginal social benefit is higher because of the positive externality. Therefore, the marginal social benefit of the rosebushes exceeds the market price. So, choice B is the correct answer.

Betsy Loves to Garden, and Her Rose Garden Is Enjoyed