If Negative Externalities Are Created in the Production of a Good

Multiple Choice

If negative externalities are created in the production of a good, what will society do?

A) It will produce too much of the good, since the marginal private cost to firms is greater than the marginal social cost.
B) It will produce too little of the good, since the marginal private cost to firms is less than the marginal social cost.
C) It will produce too much of the good, since the marginal private cost to firms is less than the marginal social cost.
D) It will produce too little of the good, since the marginal private cost to firms is greater than the marginal social cost.