When the Social Cost of an Externality Is Lower Than

Multiple Choice

When the social cost of an externality is lower than its private cost:

A) society is likely to benefit from a corrective tax
B) the externality is a positive one and society will not consume enough of the good
C) the externality is a positive one and society will consume too much of the good
D) society will benefit from the introduction of tradeable permits for production of the good