What does the private market produce when a negative externality exists?
A)Products at a high opportunity cost
B)Less than the economically efficient output level
C)Products at a low opportunity cost
D)More than the economically efficient output level

Question

Quizplus · Accepted Answer

When a negative externality exists, the private market tends to produce more than the economically efficient output level because it does not account for the external costs imposed on society.

What Does the Private Market Produce When a Negative Externality