If the Use of a Common Resource Is Determined in the Private

Multiple Choice

If the use of a common resource is determined in the private market, the resource:

A) will be underused, since the marginal benefit will be equal to the marginal private cost of production, which is greater than the marginal social cost.
B) will be overused, since the marginal benefit will be equal to the marginal private cost of production, which is less than the marginal social cost.
C) will be overused, since the marginal benefit will be equal to the marginal private cost of production, which is greater than the marginal social cost.
D) may not be efficiently allocated, but society will be better off than if the government intervened and tried to improve the situation, since government intervention always makes a bad situation worse.