When the production of a good generates negative externalities,________.
A) the fixed cost of production is zero
B) the variable cost of production is zero
C) the private cost of production exceeds the social cost of production
D) the social cost of production exceeds the private cost of production

Question

Quizplus · Accepted Answer

When the production of a good generates negative externalities, the cost incurred by society exceeds the cost paid by the producer. In other words, the social cost of production exceeds the private cost of production. Therefore, the correct choice is D.

When the Production of a Good Generates Negative Externalities,________