Figure 13-4 shows a market with a positive externality. -Refer to Figure 13 -4. In the absence of any government intervention, the private market A) under produces by Q_n-Q_munits. B) under produces by Q_o-Q_munits. C) over produces by Q_o-Q_munits. D) over produces by Q_n-Q_munits.

Question

Quizplus · Accepted Answer

The correct answer involves recognizing that the private market typically underproduces in the presence of positive externalities or public goods, leading to a quantity less than the socially optimal level.

Figure 13-4 Shows a Market with a Positive Externality