QUESTION 5 The graph below illustrates private market equilibrium Assuming that there is an external benefit associated with production, how does the optimal price and quantity compare to the private market equilibrium a optimal price is higher, optimal quantity is less b optimal price is higher, optimal quantity is greater c optimal price is lower, optimal quantity is less d optimal price is lower, optimal quantity is greater

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Question: QUESTION 5 The graph below illustrates private market equilibrium. Assuming that there is an external benefit associated with production, how does the optimal price and

QUESTION

5

The graph below illustrates private market equilibrium. Assuming that there is an external benefit associated with production, how does the optimal price and quantity compare to the private market equilibrium?

.

optimal price is higher, optimal quantity is less

.

optimal price is higher, optimal quantity is greater

.

optimal price is lower, optimal quantity is less

.

optimal price is lower, optimal quantity is greater

QUESTION 5 The graph below illustrates private market equilibrium. Assuming that

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