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    Exam 31: Market Failure: Externalities, Public Goods, and Asymmetric Information
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    Exhibit 31-5 -Refer to Exhibit 31-5. If a Positive Externality Exists Then
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Exhibit 31-5 -Refer to Exhibit 31-5. If a Positive Externality Exists Then

Question 179

Question 179

Multiple Choice

Exhibit 31-5
Exhibit 31-5    -Refer to Exhibit 31-5. If a positive externality exists then the socially optimal output is A)  Q<sub>1</sub>. B)  Q<sub>2.</sub> C)  Q<sub>1</sub> - Q<sub>2</sub>. D)  Q<sub>2</sub> - Q<sub>1</sub>.
-Refer to Exhibit 31-5. If a positive externality exists then the socially optimal output is


A) Q1.
B) Q2.
C) Q1 - Q2.
D) Q2 - Q1.

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