In the presence of positive production externalities, a monopolist might produce the efficient output level.
Answer the following statement true (T) or false (F)
False
Rationale: In the presence of positive externalities, the efficient quantity is larger than the quantity produced if only private MC is set to MR. The quantity where MC=MR is the monopolist quantity. Introducing a positive externality then moves the efficient quantity further out without changing the quantity the monopolist would produce -- implying the monopolist will deviate even further from efficiency.
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