If a negative consumption externality were present in a market, the social benefit curve would be:
A)above the private demand curve.
B)below the private demand curve.
C)identical to the private demand curve.
D)The social benefit curve's location cannot be determined without more information.

Question

Quizplus · Accepted Answer

A negative consumption externality means that the social cost of consumption is higher than the private cost, leading to a situation where the social benefit is less than what is perceived privately. This results in the social benefit curve being below the private demand curve.

If a Negative Consumption Externality Were Present in a Market