The graph shown displays a market with an externality. If the market quantity is 32 units, and the efficient quantity is 49 units, which of the following statements is true?Deadweight loss is represented by areas H + K.Line Y represents the social marginal benefit curve.This shows a positive externality.
A)III only
B)I and II only
C)II and III only
D)I only

Question

The graph shown displays a market with an externality.  If the market quantity is 32 units, and the efficient quantity is 49 units, which of the following statements is true?Deadweight loss is represented by areas H + K.Line Y represents the social marginal benefit curve.This shows a positive externality.
A)III only 
B)I and II only 
C)II and III only 
D)I only

Quizplus · Accepted Answer

The Answer of The graph shown displays a market with an externality.  If the market quantity is 32 units, and the efficient quantity is 49 units, which of the following statements is true?Deadweight loss is represented by areas H + K.Line Y represents the social marginal benefit curve.This shows a positive externality.
A)III only 
B)I and II only 
C)II and III only 
D)I only

The Graph Shown Displays a Market with an Externality