Generally, negative externalities result in
A)too much of a good being produced compared to the socially optimal level.
B)the socially optimal output of a good being produced.
C)too little of a good being produced compared to the socially optimal level.
D)a higher price for a product compared to the price charged at the socially optimal level.

Question

Quizplus · Accepted Answer

Negative externalities impose costs on society that are not reflected in the market price, leading to an overproduction of the good compared to the socially optimal level. This is because producers do not take into account the full cost of their production, resulting in a lower price than the optimal level, which encourages a higher quantity to be supplied.

Generally, Negative Externalities Result in