Exhibit 31-2

-Refer to Exhibit 31-2.If the exhibit represents a positive externality situation,the private benefit of expanding output from Q₁ to Q₂ is the area of

Question

Exhibit 31-2 -Refer to Exhibit 31-2.If the exhibit represents a positive externality situation,the private benefit of expanding output from Q₁ to Q₂ is the area of

Quizplus · Accepted Answer

The private benefit is represented by the willingness of the producer to expand output, which is the marginal private benefit (the price they can sell their additional units for). In this case, it is represented by the vertical distance between Q₁ and the demand curve (EQ). Therefore, the private benefit of expanding output from Q₁ to Q₂ is equal to the area Q₁AEQ₂.

Exhibit 31-2 -Refer to Exhibit 31-2.If the Exhibit Represents a Positive Externality