Suppose the Production of a Good Results in Positive Externalities

Multiple Choice

Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then

A) output will be at a higher level than if all benefits were not taken into account.
B) output will be at a lower level than the socially optimal level.
C) the marginal private benefit curve will lie above and to the right of the marginal social benefit curve.
D) there will be underproduction.