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-Refer to the Above Supply and Demand Graph for a Public

question 151

Multiple Choice

  -Refer to the above supply and demand graph for a public good.Which one of the following statements is TRUE? A)  The supply curve reflects the marginal cost and the demand curve reflects the marginal benefit of this public good. B)  The demand curve reflects the marginal cost and the supply curve reflects the marginal benefit of this public good. C)  There will be an overallocation of resources towards this good at output level Q<sub>1</sub>. D)  There will be an underallocation of resources towards this good at output level Q<sub>3</sub>. E)  There will be an optimal allocation of resources at output level Q<sub>1.</sub>
-Refer to the above supply and demand graph for a public good.Which one of the following statements is TRUE?


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