Refer to the Diagram of the Market for Product X

Multiple Choice

Refer to the diagram of the market for product X. Curve St embodies all costs (including externalities) , and Dt embodies all benefits (including externalities) associated with the production
And consumption of X. Assuming the equilibrium output is Q2, we can conclude that the existence
Of external

A) costs has resulted in an overallocation of resources to X.
B) benefits has resulted in an overallocation of resources to X.
C) costs has resulted in an underallocation of resources to X.
D) benefits has resulted in an underallocation of resources to X.