Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
Figure: Correcting for Market Failure
-(Figure: Correcting for Market Failure) There is an external cost in the market illustrated in the figure Correcting for Market Failure. Economists argue that in an unregulated private market, _____ is produced. In the figure, the supply curve (S₁) reflects _____ marginal cost.

A) too little; private
B) too much; private
C) too much; external
D) too little; external and private