Question

Electricity has a negative production externality because​ ______.

a. a marginal external cost lowers the marginal benefit from consuming it

b. the marginal private cost of producing it increases as more of it is produced

c. its marginal benefit decreases as more of it is consumed

d. the marginal social cost of producing it exceeds the marginal private cost of producing it

Answer 1

The correct option is D

Step-by-step explanation:

Negative production externality is due to the side effects of the production activities and it is a consequence of a firm or an individual by making a decision for which will not have to pay the whole cost and the electricity having a negative production externality,it is because the marginal social cost of producing the electricity exceeds or surpass the marginal private cost of producing the electricity.