Figure 8.2
-Refer to Figure 8.2. The market equilibrium is Q₁. Point Q₂represents the optimal point of production. This indicates that

Question

Figure 8.2 -Refer to Figure 8.2. The market equilibrium is Q₁. Point Q₂represents the optimal point of production. This indicates that

Quizplus · Accepted Answer

The optimal point of production being greater than the market equilibrium suggests that the good generates a positive externality, as the social benefit exceeds the private benefit, leading to underproduction in a free market.

Figure 8.2 -Refer to Figure 8.2. the Market Equilibrium Is Q1. Point

Figure 8.2 -Refer to Figure 8.2. the Market Equilibrium Is Q₁. Point