Refer to the above supply and demand graph for a public good. Which one of the following statements is correct?
A) The supply curve reflects the marginal cost and the demand curve reflects the marginal benefit of this public good.
B) The demand curve reflects the marginal cost and the supply curve reflects the marginal benefit of this public good.
C) There will be an overallocation of resources at output level Q1.
D) There will be an underallocation of resources at output level Q3.
Correct Answer:
Verified
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