When does a positive externality take place?

Multiple choice question for Market. Select an option, then review the explanation below.

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When the social marginal costs exceed the private marginal costsWhen a good is absent from the free marketWhen social marginal cost matches social marginal benefitWhen social marginal benefits surpass private marginal benefits

Explanation

A positive externality arises when the social marginal costs are greater than the private marginal costs, indicating that the overall cost to society is higher than what individuals bear privately.

Practice related questions from the same subject.

1.Broadcasting firms use satellite TV subscriptions and signal detection tools primarily to combat which issue?
2.Which of the following is a classic example of a public good?
3.Which of the following factors can lead to market failure?
4.When a neighbor burns yard debris and smoke enters your home, what type of externality does this represent?
5.Why is a competitive equilibrium considered Pareto efficient?

When does a positive externality take place?

Explanation

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