A positive externality occurs whenever:
a. an increase in the output of one firm lowers costs for other firms.
b. a decrease in the output of one firm lowers costs for other firms.
c. an increase in costs of one firm lowers costs for other firms.
d. a decrease in one firm's hiring of labor lowers labor costs for other firms.
Ans: a. an increase in the output of one firm lowers costs for other firms.
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