Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. The positions of the graphs indicate that there are
A)external benefits from production and external costs from consumption of the product.
B)external costs from production and external benefits from consumption of the product.
C)external benefits from production and consumption of the product.
D)external costs from production and consumption of the product.

Question

Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. The positions of the graphs indicate that there are
A)external benefits from production and external costs from consumption of the product. 
B)external costs from production and external benefits from consumption of the product. 
C)external benefits from production and consumption of the product. 
D)external costs from production and consumption of the product.

Quizplus · Accepted Answer

The Answer of  Refer to the provided supply and demand graph. S₁ and D₁ represent the current market supply and demand, respectively. S₂ and D₂ represent the socially optimal supply and demand. The positions of the graphs indicate that there are
A)external benefits from production and external costs from consumption of the product. 
B)external costs from production and external benefits from consumption of the product. 
C)external benefits from production and consumption of the product. 
D)external costs from production and consumption of the product.

Refer to the Provided Supply and Demand Graph