Complete the following sentence so that it ALWAYS holds true: In the presence of a positive production externality,________ is produced relative to the optimal level.

Question

Quizplus · Accepted Answer

In the presence of a positive production externality, the marginal social benefit exceeds the marginal private benefit. Therefore, producers do not account for the full social benefit of their production, resulting in too little being produced relative to the optimal level.

Complete the Following Sentence So That It ALWAYS Holds True