Positive externalities:
A)are similar to negative externalities in their ease of measuring marginal benefits.
B)are likely to be solved with the use of a Pigouvian tax.
C)are difficult to measure since marginal social benefits are hard to observe.
D)result from greater than optimal production of a good.

Question

Quizplus · Accepted Answer

Positive externalities are difficult to measure since the benefits that accrue to society are not observed in the market, and so are not reflected in the market price. This means that marginal social benefits are hard to estimate accurately.

Positive Externalities