Which of the following is a likely consequence of a negative externality, given that the market is allowed to operate freely?
A) An efficient allocation of resources
B) Production of less than the socially efficient quantity of the good
C) Production of more than the socially efficient quantity of the good
D) Social costs that are equal to private costs
E) Marginal private cost exceeding marginal social cost at the market equilibrium quantity
Correct Answer:
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