2. Efficiencyr in the presence of externalities Trucks impose many external costs on society: heawr air and noise pollution, traffic safety issues and road congestion, and so on. Therefore, the market equilibrium quantity of diesel trucks does not equal the sociall'ir optimal quantity. The following graph plots the demand for diesel trucks {their private value), the supplyr of diesel trucks {the private cost of producing them), and the social cost of diesel trucks, including both the private cost and external costs. Use the biacic point (pies symboU to indicate the market eguiiibrium quantity. Next, use the pumie point (diamond symbei) to indicate the sociaiiy c:,i:ItirriauI quantity. Social Cost Market Equilibrium Supply (Private Cost) Socially Optimal Level PRICE OF DIESEL TRUCKS Demand (Private Value) QUANTITY OF DIESEL TRUCKS