Use the Figure Below to Answer the Following Question(s)

question 71

Multiple Choice

Use the figure below to answer the following question(s) . Figure 5-3
Figure 5-3 illustrates the market for a product that generates an external benefit. D₁ is the private market demand curve, while D₂ is the demand curve including the external benefit. Which of the following is true?

• A) Point a illustrates the competitive private market outcome, while point b illustrates the outcome consistent with economic efficiency.
• B) Point b illustrates the competitive private market outcome, while point a illustrates the outcome consistent with economic efficiency.
• C) The competitive private market outcome is consistent with the conditions for economic efficiency.
• D) The good will tend to be oversupplied relative to the conditions for economic efficiency.

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Definitions:

Medium Status

A position or level that is in the middle of a hierarchy or ranking system, neither high nor low.

Group Norms

The shared expectations and rules that guide behavior of people within social groups.

Conform

To align behaviors, attitudes, or beliefs with those of a group, often to fit in or comply with norms.

Break Norms

The act of violating established social rules, standards, or expectations in a particular context.