If a positive externality exists in the consumption of a good, the private market equilibrium quantity will be a. the same as the socially optimal quantity, since the marginal private benefit equals the marginal social benefit b. greater than the socially optimal quantity, since the marginal social cost exceeds the marginal private cost c. greater than the socially optimal quantity, since the marginal private benefit exceeds the marginal social benefit d. less than the socially optimal quantity, since the marginal social benefit exceeds the marginal private benefit e. less than the socially optimal quantity, since the marginal private benefit exceeds the marginal private cost
If a positive externality exists in the consumption of a good, the private market equilibrium quantity will be a. the same as the socially optimal quantity, since the marginal private benefit equals the marginal social benefit b. greater than the socially optimal quantity, since the marginal social cost exceeds the marginal private cost c. greater than the socially optimal quantity, since the marginal private benefit exceeds the marginal social benefit d. less than the socially optimal quantity, since the marginal social benefit exceeds the marginal private benefit e. less than the socially optimal quantity, since the marginal private benefit exceeds the marginal private cost
Chapter4: Markets In Action
Section: Chapter Questions
Problem 17SQ
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If a positive externality exists in the consumption of a good, the private market
a. the same as the socially optimal quantity, since the marginal private benefit equals the marginal social benefit
b. greater than the socially optimal quantity, since the marginal social cost exceeds the marginal private cost
c. greater than the socially optimal quantity, since the marginal private benefit exceeds the marginal social benefit
d. less than the socially optimal quantity, since the marginal social benefit exceeds the marginal private benefit
e. less than the socially optimal quantity, since the marginal private benefit exceeds the marginal private cost
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