Question 1. Which area represents external costs at the quantity that maximizes social surplus?

a. M + L

b. K

c. K + M + L

d. K + M

Question 2. Which area represents external costs at the unregulated equilibrium?

a. M + L

b. K + M + L

c. K

d. K + M

Question 3. Which area represents social costs at the unregulated equilibrium?

a. K + M + L + S + R

b. S

c. K + S

d. S + R

Question 4. Which area represents market surplus at unregulated equilibrium?

a. J + K

b. J + K + M

c. J - L

d. J

Use the diagram below to answer the first 4 questions. Use the diagram below to answer the first 4 questions