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ioda
4 years ago
11

Suppose the production of a good results in positive externalities. The market will tend to _______________ this good and the go

od's marginal social benefits curve will ______________________. a. overproduce, lie to the left of the good's demand curve b.
Business
1 answer:
IgorLugansk [536]4 years ago
6 0

Answer:

Suppose the production of a good results in positive externalities. The market will tend to <u>overproduce</u> this good and the good's marginal social benefits curve will <u>lie to the left of the good's demand curve.</u>

Explanation:

A positive production externality is the positive effect an activity imposes on an unrelated third party such as the positive effect production activity has on the market.

A positive externality exists if the production and consumption of a good or service benefits a third party not directly involved in the market transaction. For example, education directly benefits the individual and also provides benefits to society as a whole through the provision of more responsible citizens.

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