Refer to the Below Diagram of the Market for Product

Multiple Choice

Refer to the below diagram of the market for product X.Curve S_t embodies all costs (including spillovers) and D_t embodies all benefits (including spillovers) associated with the production and consumption of X.Assuming the equilibrium output is Q₁, we can conclude that the existence of spillover:

A) costs have resulted in an over-allocation of resources to X.
B) benefits have resulted in an over-allocation of resources to X.
C) costs have resulted in an under-allocation of resources to X.
D) benefits have resulted in an under-allocation of resources to X.