If a Negative Externality Exists in the Production of Paper

Multiple Choice

If a negative externality exists in the production of paper and paper is sold in a perfectly competitive market,then the equilibrium output

A) is greater than the socially optimal output.
B) is smaller than the socially optimal output.
C) is the same as the socially optimal output.
D) may be either more or less than the socially optimal output.
E) may be either equal to,or less than,the socially optimal output.