Refer to the Provided Supply and Demand Graph

Multiple Choice

Refer to the provided supply and demand graph. S1 and D1 represent the current market supply and demand, respectively. S2 and D2 represent the socially optimal supply and demand. The positions
Of the graphs indicate that there are

A) external benefits from production and external costs from consumption of the product.
B) external costs from production and external benefits from consumption of the product.
C) external benefits from production and consumption of the product.
D) external costs from production and consumption of the product.