Question

When a market experiences a positive externality,
a. the government can internalize the externality by imposing a tax on the product.
b. the demand curve does not reflect the value to society of the good.
c. the private value is greater than the social value.
d. too much of the good is being produced?

Answer 1

When a market experiences a positive externality, the demand curve does not reflect the value to society of the good. 

An externality is a side effect or consequence of an industrial or commercial activity that affects others without reflecting on the good or service. This is a cost or benefit that affects someone who didn't ask for it to.