Refer to the Graph Given Below

question 64

Multiple Choice

Refer to the graph given below. The graph above shows the supply of and the demand for a public good.Which of the following statements is correct?

• A)The supply curve reflects the marginal cost of producing each unit of the good, and the demand curve reflects the marginal benefit of consuming each unit of the good.
• B)The demand curve reflects the marginal cost of producing each unit of the good, and the supply curve reflects the marginal benefit of consuming each unit of the good.
• C)There will be an overallocation of resources at output level Q₁.
• D)There will be an underallocation of resources at output level Q₃.

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