Consider a scenario where an oil company is operating a refinery in a developing country. For simplicity's sake assume that the refinery's output is consumed entirely within the country.

Assuming decreasing marginal benefit MB to consumers for consumption of refined oil, increasing private cost MC to the oil company, and constant marginal health damages to society MD, draw the graph showing the privately and socially optimal equilibria. Will the firm over or underproduce oil relative to the social optimum?