Question

tb mc qu. 04-45 positive externalities lead to... positive externalities lead to multiple choice overproduction and underallocation. underproduction and underallocation. overproduction and overallocation. underproduction and overallocation.

Explanation:

Positive externalities occur when the consumption or production of a good or service benefits a third - party not directly involved. In the case of positive externalities, the market under - produces the good or service because the private benefits to producers and consumers are less than the social benefits. Also, resources are under - allocated to the production of the good or service with positive externalities as producers do not take into account the full benefits to society.

Answer:

B. underproduction and underallocation