Question

The greater the magnitude of the external benefits of production, a. ​ The larger is the deadweight loss from underproduction. b. ​ The greater would be the optimal tax. c. ​ The less the private market solution would deviate from the socially efficient level of output. d. ​ All of the above are true.

Answer 1

d. ​ All of the above are true

Step-by-step explanation:

External costs happen if during production or consumption of a good or a service there is a negative effect on another party. The existence of this can bring about market failure. In the presence of externalities social benefit costs are a combination of private costs and also external benefits of production.

All of the options a, n and c are true so d is the answer here.