Refer to the Above Supply and Demand Graph of Product

question 37

Multiple Choice

Refer to the above supply and demand graph of Product X. If there are positive externalities from the consumption of Product X, then the socially optimal demand curve would be:

• A) To the left of line D on the graph
• B) To the right of line D on the graph
• C) At the position of line D on the graph
• D) An upward-sloping line

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Definitions:

Insider Trading

The unlawful act of buying and selling stocks for personal gain using privileged information that is not publicly available.

Dividend

A distribution of corporate profits to the corporation’s shareholders in proportion to the number of shares held.

Securities Act

A 1933 United States law that regulates the sale of securities to the public, requiring transparency to help prevent fraud.

Market Capitalization

The total market value of a company's outstanding shares of stock, calculated by multiplying the stock's price by the total number of shares.