-Exhibit N-3 Depicts a Market Showing the Demand Curve for a Good

Multiple Choice

-Exhibit N-3 depicts a market showing the demand curve for a good and two supply curves, one reflecting the industry's private costs; the other reflecting the costs of resources to society producing the good. It is clear from this representation of the marketthat

A) there is a free-rider condition
B) there are positive externalities in this market
C) external costs exist in this industry
D) only one firm is producing the good
E) the demand curve incorporates both private and social benefits