Question

When positive externalities are present in a market a. private benefits will be greater than social benefits. b. social benefits will be greater than private benefits. c. only government regulation will solve the problem. d. the market will not be able to generate an equilibrium.

Answer 1

Answer:

b. social benefits will be greater than private benefits

Explanation:

Positive externalities can be defined as those that produce positive effects for society in relation to the consumption of a good or service.

This is because the social benefit is the sum of the private benefit plus the sum of the external benefit.

An example of positive externality pertinent to the present is the fact that vaccinating people generates greater positive effects on society, because when vaccinating an individual there is less chance of having more people infected with some disease.

So it is correct to say that the social benefits will be greater than the private ones. Letter b.