If a market solution provides greater marginal social costs than marginal social benefits, then:
a positive externality is present. any externality has already been internalized. no net externality is present. a negative externality is present.
If a market solution provides greater marginal social costs than marginal social benefits, then:
a negative externality is present.
This is because a negative externality occurs when the costs imposed on society (marginal social costs) exceed the benefits received by society (marginal social benefits), leading to an overall inefficiency in the market.