Explanation The cost of the production is the costs associated with the production of a commodity in the economy. It includes the cost of the raw materials used for production, the cost of the equipments as well as labor used for the production process. The externalities are the costs or benefits to the third party who is not involved in the economic activity. When the result is additional cost to the individual, it is known as the Negative externality and the benefits are known as the positive externalities. Option (d): When there are negative externalities such as the pollution exists, it means that the production would produce the pollution. When the market is competitive market, the firms would compete more to produce more. As a result of more output by the competing firms, the output of the economy would be more than the efficient level. This means that the option 'd' is the correct answer...