. Consider the market illustrated in the figure to the right. Supply curve S, represents the private...

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Consider the market illustrated in the figure to the right. Supply curve S, represents the private cost of production and demand curve D, represents the private benefit from consumption. Suppose the consumption of this good creates a positive externality. In turn, the social benefit from consumption is represented by demand curve D2. Show how the externality affects market efficiency. Use the triangle drawing tool to shade in the new economic surplus (New surplus) or the deadweight loss (Deadweight loss) created by the positive externality. Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects. D, D2 Quantity Consider the market illustrated in the figure to the right. Supply curve S, represents the private cost of production and demand curve D, represents the private benefit from consumption. Suppose the consumption of this good creates a positive externality. In turn, the social benefit from consumption is represented by demand curve D2. Show how the externality affects market efficiency. Use the triangle drawing tool to shade in the new economic surplus (New surplus) or the deadweight loss (Deadweight loss) created by the positive externality. Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects. D, D2 Quantity

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The market quantity is Q1 that is the quantity corresponding to the intersection ... View the full answer