Suppose That the Production of a Good Causes Negative Externalities

Multiple Choice

Suppose that the production of a good causes negative externalities. What will happen if the good is produced at the level at which the marginal private cost curve meets the demand curve?

A) The level of output will be socially desirable.
B) The level of output will result in a net social cost.
C) There will be a surplus.
D) The producers will incur losses.
E) There will be no buyer in the market.