The Presence of Negative Externalities Leads to a Misallocation of Societal

Multiple Choice

The presence of negative externalities leads to a misallocation of societal resources because:

A) ​whenever external costs are imposed on outside parties, the good should not be produced at all.
B) ​less of the good than is ideal for society is produced.
C) ​there are some costs associated with production that the producer fails to take into consideration.
D) ​the government always intervenes in markets when negative externalities are present, and the government is inherently inefficient.