When Firms Do Not Have to Pay the True Social

Multiple Choice

When firms do not have to pay the true social costs for resources

A) they have an incentive to reduce pollution voluntarily with their excess profits.
B) the net social benefits are increased.
C) they will use too little of them, from society's perspective.
D) no external diseconomies are present.
E) the public is induced to buy more of that output than it would otherwise.