Exhibit 17.8

-Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.The graph shows market equilibrium in the presence of ______
A)positive externalities.
B)positive and negative externalities.
C)negative externalities.
D)the Coase theorem.
E)asymmetric information.

Question

Exhibit 17.8
 
-Refer to Exhibit 17.8,which shows the demand,the supply,and the marginal social benefit curves.The graph shows market equilibrium in the presence of ______
A)positive externalities. 
B)positive and negative externalities. 
C)negative externalities. 
D)the Coase theorem. 
E)asymmetric information.

Quizplus · Accepted Answer

The presence of a marginal social benefit curve that lies above the demand curve indicates positive externalities. This is because the social benefits of consuming the good exceed the private benefits received by consumers, which is characteristic of positive externalities.

Exhibit 17.8 -Refer to Exhibit 17.8,which Shows the Demand,the Supply,and the Marginal