Suppose it has been determined that, at 100 units of output, the marginal cost is

$45 and the social cost of a negative externality is $10. Which of the following

is TRUE?

The production of the good in question should be expanded beyond 100 units.

To find the "real" marginal cost, subtract the social cost from the marginal cost, because the externality is negative.

To find the total marginal cost of production, add the social cost to the marginal cost.

The production of the good in question should be kept at 100 units.