Social benefit of good that exhibits positive externalities

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Reference no: EM131096632

The marginal social benefit of a good that exhibits positive externalities is ( Greater or Less than ) the private social benefit of that good. Why?

A. When a trade causes positive externalities, the marginal social benefit equals the marginal private benefit minus the costs incurred by third parties not involved in the trade.

B. When a trade causes positive externalities, the marginal social benefit equals the marginal private benefit plus the benefits received by third parties not involved in the trade.

C. When a trade causes positive externalities, the marginal social benefit equals the marginal private benefit plus the costs incurred by third parties not involved in the trade.

D. When a trade causes positive externalities, the marginal social benefit equals the marginal private benefit minus the benefits received by third parties not involved in the trade.

Reference no: EM131096632

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