Final answer:
The government restricting consumption in a market with a negative externality like pollution would lead to a more socially efficient outcome, as the supply curve does not account for all social costs, causing excessive production without intervention.
Step-by-step explanation:
If the government were to restrict consumption to the efficient level in a market where a negative externality is present, the market outcome would be an adjustment toward the social optimum. In the absence of government intervention, markets experiencing negative externalities, such as pollution, do not achieve an efficient level of output on their own due to market failure. This is because the supply curve in such a scenario does not reflect the full social costs associated with production, which results in a quantity of goods being produced and consumed that exceeds the socially efficient level. Government intervention, such as imposing taxes or regulations, can internalize these externalities, aligning private incentives with social well-being and reducing production to an amount that accounts for the true costs to society.