A Negative Production Externality Results In

Multiple Choice

A negative production externality results in:

A) A DWL in the market equilibrium because there is too much output relative to the efficient level of production.
B) A DWL in the market equilibrium because output is too low in the market equilibrium relative to the socially efficient level of output.
C) No DWL loss in the market equilibrium as all costs and benefits are captured in the actions of market participants.
D) All of the above.
E) None of the above.