Suppose That the XYZ Industry Produces a Product That Results

Multiple Choice

Suppose that the XYZ industry produces a product that results in negative external costs to society. This information suggests that

A) resources are under-allocated to the industry.
B) the equilibrium market price of the product includes the external costs borne by society.
C) resources are over-allocated to the industry.
D) at the market price, quantity demanded is less than quantity supplied.