External benefits are associated with the production of batteries.Without government regulation,the market will:
A)produce too many batteries.
B)price batteries at less than the marginal social cost.
C)price batteries at less than the marginal social benefit.
D)price batteries above the marginal social cost.

Question

Quizplus · Accepted Answer

When external benefits are present, the market tends to produce less of the good than is socially optimal because it does not account for the additional benefits to society. This results in a price that is lower than the marginal social benefit, indicating that more of the good should be produced to maximize societal welfare.

External Benefits Are Associated with the Production of Batteries