Exhibit 30-2
?
A. It is the quantity of output at which marginal social benefits (MSB) equal marginal private benefits (MPB).
B. It is the quantity of output at which MPB > MSB.
C. It is the market output-the quantity of output that exists if the external benefits associated with the positive externality are not taken into account.
D. It is the socially optimal output-the quantity of output that exists if the external benefits associated with the positive externality are taken into account.
E. none of the above
Answer: D
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a. True b. False
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How does a positive externality in consumption reduce economic efficiency?
What will be an ideal response?