Quiz: Quiz 3 - Ch. 4, 5 (externalities), 18 This Question: 1 pt 13 of 15 (8 comp

Question

Quiz: Quiz 3 - Ch. 4, 5 (externalities), 18 This Question: 1 pt 13 of 15 (8 complete) How do externalities affect markets? If a positive externality in consumption is present in a market, then O A. the private cost of production will be different than the social cost of production. 0 B. consumer and producer surplus will be maximized. C. te private benefit from consumption will be different than the social benefit from consumption. D, the social cost of production will be equal to the social benefit from consumption O E- the private cost of production will be equal to the private benefit from consumption.

Explanation / Answer

option c.

Due to positive externalities marginal private benefits is different from social benefits. in this case, consumers get benefits from the other's consumers, so as a sum marginal social benefits became the sum of marginal private benefits and marginal external benefits(positive externalities).

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