Suppose that at current production levels, A Major Corporation’s marginal cost is $15, its marginal external cost is $5, and the marginal social benefit of production is $25. In this case, the corporation:
A.	is imposing too much harm on the environment and should cut back production.
B.	is producing the efficient amount.
C.	is producing an amount less than the efficient amount.
D.	could make society better off by decreasing production.
Answer:C
Suppose that at current production levels, A Major Corporation’s marginal cost is $15, its marginal external cost is $5, and the marginal social benefit of production is $25. In this case, the corporation:
A.	is imposing too much harm on the environment and should cut back production. B.	is producing the efficient amount. C.	is producing an amount less than the efficient amount. D.	could make society better off by decreasing production.