A consequence of a negative externality is that social costs __________ private costs, and the socially optimal level of output __________.
A)equal; is not equal to social costs or private costs
B)do not equal; is obtained
C)do not equal; is not obtained
D)equal; is obtained
E)equal; is not obtained

Question

Quizplus · Accepted Answer

Negative externalities cause social costs to exceed private costs, leading to a higher level of output than is socially optimal, hence the socially optimal level of output is not obtained.

A Consequence of a Negative Externality Is That Social Costs