The reason that a good is underpurchased in cases with positive externalities is that the marginal _____benefits are greater than the marginal _____ benefits.

Question

Quizplus · Accepted Answer

In cases with positive externalities, the marginal social benefits (which include both private benefits and external benefits) are greater than the marginal private benefits. This discrepancy leads to underpurchase of the good, as individuals do not consider the external benefits their consumption provides to others.

The Reason That a Good Is Underpurchased in Cases with Positive