If Negative Externalities Are Created in the Production of a Good

If negative externalities are created in the production of a good, then society will:

A) produce too much of the good since the marginal private cost to firms is less than the marginal social cost.
B) produce too little of the good since the marginal private cost to firms is less than the marginal social cost.
C) produce too much of the good since the marginal private cost to firms is greater than the marginal social cost.
D) produce too little of the good since the marginal private cost to firms is greater than the marginal social cost.
E) always produce the most efficient quantity of output.

Correct Answer:

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