Refer to the below diagram of the market for product X.Curve S_t embodies all costs (including spillovers) and D_t embodies all benefits (including spillovers) associated with the production and consumption of X.Assuming the equilibrium output is Q₂, we can conclude that the existence of spillover: A)costs have resulted in an over-allocation of resources to X. B)benefits have resulted in an over-allocation of resources to X. C)costs have resulted in an under-allocation of resources to X. D)benefits have resulted in an under-allocation of resources to X.

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Quizplus · Accepted Answer

The Answer of Refer to the below diagram of the market for product X.Curve S_t embodies all costs (including spillovers) and D_t embodies all benefits (including spillovers) associated with the production and consumption of X.Assuming the equilibrium output is Q₂, we can conclude that the existence of spillover: A)costs have resulted in an over-allocation of resources to X. B)benefits have resulted in an over-allocation of resources to X. C)costs have resulted in an under-allocation of resources to X. D)benefits have resulted in an under-allocation of resources to X.

Refer to the Below Diagram of the Market for Product