If there are no externalities, a competitive market achieves economic efficiency.If there is a negative externality, economic efficiency will not be achieved because
A)too little of the good will be produced.
B)too much of the good will be produced.
C)a deadweight loss will occur that is equal to the area under the demand curve for the good.
D)economic surplus is maximized.

Question

Quizplus · Accepted Answer

A negative externality causes the social cost of production to exceed the private cost, leading firms to produce more than would be socially optimal. This results in overproduction and a deadweight loss, which is the loss of economic efficiency.

If There Are No Externalities, a Competitive Market Achieves Economic