The figure given below shows the demand and supply curves of steel.Sp is the private supply curve, and Ss is the social supply curve that includes both private costs and external costs. Figure 13.2
According to Figure 13.2:
A) both points a and b are socially efficient.
B) both points a and b are inefficient.
C) point a represents the social equilibrium, whereas point b represents the private equilibrium.
D) point a represents the private equilibrium, whereas point b represents the social equilibrium.
E) when external costs are zero, the socially efficient output level is equal to 0Qs units.
Correct Answer:
Verified
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