If production of a good creates an external cost, the amount of output where the marginal social benefit equals the marginal private cost is
A) inefficient.
B) inequitable.
C) unattainable.
D) efficient.

Question

Quizplus · Accepted Answer

When production creates an external cost, the marginal private cost is lower than the marginal social cost, leading to overproduction and inefficiency.

If Production of a Good Creates an External Cost, the Amount