What typically occurs in a free market when a positive externality is present?

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The good or service is consumed less than the socially optimal level.The good or service is consumed more than is efficient.Authorities might impose taxes to reduce output.Reducing production could improve overall societal welfare.

Explanation

When a positive externality exists, the free market tends to result in under-consumption because individuals do not fully account for the benefits to others. This leads to less consumption than is socially optimal. Options B, C, and D describe scenarios more consistent with negative externalities or incorrect policy responses.