Failure to consider the impact of a positive externality from an activity results in

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When there is a positive externality associated with an activity, the social benefit exceeds the private benefit. This means that the market equilibrium quantity will be lower than the socially optimal quantity, resulting in too little of that activity being produced. Failure to consider the impact of this positive externality leads to not taking the necessary steps to correct this market failure which ultimately results in production of too little of that activity.

Failure to Consider the Impact of a Positive Externality from an Activity