For a Product with External Benefits That Is Produced in a Competitive

Multiple Choice

For a product with external benefits that is produced in a competitive, unregulated market, how can the resulting market output be described?

A) Underproduction and overproduction are both possible depending on whether the external benefit is to consumption or production.
B) There is overproduction compared to the efficient level.
C) Production equals the efficient level.
D) There is underproduction compared to the efficient level.
E) None of the above is correct.