Private Markets Fail to Reach a Socially Optimal Equilibrium When

Multiple Choice

Private markets fail to reach a socially optimal equilibrium when positive externalities are present because the

A) private benefit equals the social benefit at the private market solution.
B) private cost exceeds the private benefit at the private market solution.
C) social value exceeds the private value at the private market solution.
D) private cost exceeds the social benefit at the private market solution.