When the production or consumption of a good creates a positive externality, it is deemed a market failure because at the market quantity
Market equilibrium occurs where marginal private benefit equals marginal cost to society. With a positive externality, the MSB > MPB at the market quantity.
269 MCQ for effective preparation of the test of Microeconomics of Economics section.
Read the MCQ statement: When the production or consumption of a good creates a positive externality, it is deemed a market failure because at the market quantity , keenly and apply the method you have learn through the video lessons for Microeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 13-4023.