Which of the following statements is not true in the presence of externalities?
A)Social marginal cost equals the sum of internal and external marginal costs.
B)A competitive industry generally produces more than a monopoly.
C)A competitive industry always produces more than the socially efficient level of output.
D)A monopoly always produces more than the socially efficient level of output.

Question

Quizplus · Accepted Answer

A monopoly typically produces less than the socially efficient level of output because it restricts output to maximize profits, unlike a competitive market which may overproduce in the presence of negative externalities.

Which of the Following Statements Is Not True in the Presence