In an unregulated market with an external benefit,the
A) quantity produced is greater than the efficient quantity.
B) price charged is too high for efficiency.
C) quantity produced is less than the efficient quantity.
D) producer is causing pollution but not paying for it.
E) government might impose a tax to help move the market toward the efficient amount of production.

Question

Quizplus · Accepted Answer

In an unregulated market with an external benefit, the production level would be less than the efficient quantity. This is because the producer does not take into account the full benefits of production for others in the market, leading them to produce less than what would be socially optimal.

In an Unregulated Market with an External Benefit,the