Refer to the Below Supply and Demand Graph

question 85

Multiple Choice

Refer to the below supply and demand graph.Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective.This supply and demand graph indicates that there is (are) :

• A) positive externalities to the production of this product.
• B) negative externalities to the production of this product.
• C) an overallocation of resources to the production of this product.
• D) a negative externality from the production of this product.

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Definitions:

Advertising

A form of marketing communication used to promote or sell a product, service, or idea to potential customers.

Celebrity Advertising

A marketing strategy that uses the fame of a celebrity to promote products or services.

Inferior Product Quality

Products that fail to meet acceptable standards or expectations in terms of performance, durability, or reliability.

Advertising

The action of calling public attention to products, services, or events, mainly through paid announcements in various media.