Because of a _____ externality, marginal social cost is greater than marginal private cost.
A) production
B) social
C) positive
D) negative

Question

Quizplus · Accepted Answer

Negative externalities occur when the production or consumption of a good or service imposes costs on third parties not involved in the transaction, leading to a situation where the marginal social cost (the cost to society) is greater than the marginal private cost (the cost borne by the producer or consumer of the good).

Because of a _____ Externality, Marginal Social Cost Is Greater