Which of the following are true in the case of an externality?
A. In the case of an externality, all costs and benefits associated with the good are not internalized by the households and firms involved in buying and production.
B. The presence of an externality results in either under-production or over-production of the good.
C. Market-based decision making yields an efficient outcome in the presence of an externality.
D. In the case of a negative externality, the marginal social cost is higher than the marginal cost.
E. Well-defined property rights can solve the problem of externality. Choose the most appropriate answer from the options given below:
Tap an option to check your answer.