The Problem with Externalities Is Essentially One of

Multiple Choice

The problem with externalities is essentially one of

A) a discrepancy between private and social costs.
B) asymmetric information.
C) the inability of a firm in an industry characterized by increasing returns to scale to make positive profits if it sets price equal to marginal cost.
D) a failure of the market to generate socially valued outcomes.
E) the failure of the market to solve social problems.