Suppose That the Production of a Good Causes Positive Externalities

Multiple Choice

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

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