Question

Because producers do not bear the external cost of pollution

A. the market price is too high.

B. private production exceeds the economically efficient level.

C. the economically efficient level of production is achieved.

D. private production is below the economically efficient level.

Answer 1

Answer

Option B

B. private production exceeds the economically efficient level

the equilibrium which out external cost is at a higher level of output and lower costs because the external costs are not considered.

it increases the production above the level of an economically efficient level.