Exhibit 8-2
-Refer to Exhibit 8-2. The supply curve S social includes the following costs.

Question

Exhibit 8-2 ​ 
-Refer to Exhibit 8-2. The supply curve S social includes the following costs.

Quizplus · Accepted Answer

The supply curve S social includes both private costs (costs experienced by the producer) and external costs (costs experienced by third parties, such as pollution), indicating that the answer is B. There is no mention of public costs, so option C cannot be the correct answer. Option D also cannot be the correct answer because it includes public costs which are not mentioned in the exhibit.

Exhibit 8-2 ​

Exhibit 8-2