-The Figure Above Shows the Market for a Good with an External

Multiple Choice

-The figure above shows the market for a good with an external benefit. If the market is competitive and the government takes no action, the equilibrium quantity of ________ units is inefficient because ________.

A) 10; marginal social benefit exceeds marginal benefit
B) 10; marginal cost exceeds marginal benefit
C) 8; marginal benefit exceeds marginal cost
D) 8; marginal cost exceeds marginal benefit
E) 10; marginal external benefit exceeds marginal social benefit