-Refer to the Diagram Above

Multiple Choice

-Refer to the diagram above.If S1 contains the entire amount of the external cost,then

A) too little was being produced.
B) demand was too large.
C) the socially optimal amount of production,and hence the socially optimal amount of the external cost,is not zero.
D) Q3 production is excessive.
E) the marginal benefit of Q3 is less than the marginal social cost.