In a market experiencing positive externalities, the equilibrium quantity is typically ______ than the socially optimal quantity due to underproduction.

In a market with positive externalities, the equilibrium quantity is usually less than the socially optimal quantity because the benefits of the good or service extend beyond just the buyers and sellers. For example, consider education: when someone gets an education, they not only gain knowledge but also contribute to a more informed society. However, if the market only considers the private benefits, it may not produce enough educational opportunities. This underproduction occurs because the overall positive effects on society are not reflected in the price, leading to fewer resources being allocated than what is ideal for the community. Therefore, to reach the socially optimal quantity, the market needs to find a way to account for these additional benefits.