A graph of price, P$,$ versus quantity, Q$,$ shows a supply curve, Private Cost, rising linearly, a second supply curve, Social Cost, rising linearly above the first supply curve, and a demand curve, Private Value, descending linearly. A vertical line extends from Q subscript $1$ to a point on Curve Private Value to the left of the intersection of Curve Private Value and Curve Social Cost. A vertical line extends from Q subscript $2$ to the intersection of Curve Private Value and Curve Social Cost. A vertical line extends from Q subscript $3,$ crossing through the intersection of Curve Private Value and Curve Private Cost and to a point on Curve Social Cost to the right of the intersection of Curve Social Cost and Curve Private Value. A vertical line extends from Q subscript $4$ to a point on Curve Social Cost to the right of the intersection of Curve Social Cost and Curve Private Value, and to the right of line Q subscript $3.$

Refer to Figure $10-2.$ If all external costs were internalized, then the market's output would be

a$.$ Q$2.$

b$.$ Q$4.$

c$.$ Q$1.$

d$.$ Q$3.$