In the Figure Given Below,the Competitive Supply Curve of a Commodity

In the figure given below,the competitive supply curve of a commodity is given by S₁,the private marginal benefit curve is D₁,the marginal social benefit curve is D₂,and the MB_E curve reflects the marginal external benefits.
-In Figure 20-2,if the current level of output is 700 units,then the marginal social benefit is:

A) more than the marginal social cost and the output is more than the socially optimum level.
B) more than the marginal social cost and the output is less than the socially optimum level.
C) less than the marginal social cost and the output is more than the socially optimum level.
D) equal to the marginal social cost and the output is equal to the socially optimum level.

Correct Answer:

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