Which of the following statements is true?
a. In the case of positive externalities, a private market will produce too little of a good compared to the socially efficient level of output.
b. In the case of positive externalities, a private market will produce too much of a good compared to the socially efficient level of output.
c. Negative externalities occur when benefits accrue to individuals not directly involved in a transaction.
d. Positive externalities occur when costs are imposed on individuals not directly involved in a transaction.
e. In the case of negative externalities, a private market will produce too little of a good compared to the socially efficient level of output.
a
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