If the production of goods yields a negative externality, the social-cost curve lies the supply curve and the socially optimal quantity is _ than the equilibrium quantity.

a. below, less

b. above, greater

c. above, less

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Romarie Khazandra MarijuanLv10

7 Nov 2020

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Related questions

10. Suppose that electricity producers create a negative externality equal to $5 per unit. Further suppose that the government gives a $5 per-unit subsidy to producers. What is the relationship between the equilibrium quantity and the socially optimal quantity of electricity to be produced? a. They are equal. (b) The equilibrium quantity is greater than the socially optimal quantity. C. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.

When a negative externality is present in a market,

A. The quantity supplied is larger than socially optimal.

B. The average cost of production exceeds the marginal cost of production at all output levels.

C. The price charged in the market is higher than the socially optimal price.

D. The social cost of production is lower than the marginal private cost.

marooncicada250

A positive externality will cause a market to produce
a. more than is socially desirable.
b. less than is socially desirable.
c. the socially optimal equilibrium amount.
d. more than the same market would produce in the presence of a negative externality.