The Figure Given Below Shows the Demand and Supply Curves

The figure given below shows the demand and supply curves of steel. S_p is the private supply curve, and S_s is the social supply curve that includes both private costs and external costs.Figure 13.2

-According to Figure 13.2:

A) both points a and b are socially efficient.
B) both points a and b are inefficient, from the society's point of view.
C) point a represents the social equilibrium, whereas point b represents the private equilibrium.
D) point a represents the private equilibrium, whereas point b represents the social equilibrium.
E) when external costs are zero, the socially efficient output level is equal to 0Q_s units.

Correct Answer:

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