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. Consider the market illustrated in the figure to the right. Supply curve S, represents the private cost of production and demand curve D, represents

 Consider the market illustrated in the figure to the right. Supply curve S1 represents the private cost of production and demand curve D1 represents the private benefit from consumption. Suppose the consumption of this good creates a positive externality. In turn, the social benefit from Consumption is represented by demand curve D2. Show how the externality affects market efficiency. Use the triangle drawing tool to shade in the new economic surplus (New surplus) or the deadweight loss (Deadweightloss) created by the positive externality. Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects. Quantity D1 D2.

Consider the market illustrated in the figure to the right. Supply curve S, represents the private cost of production and demand curve D, represents the private benefit from consumption. Suppose the consumption of this good creates a positive externality. In turn, the social benefit from consumption is represented by demand curve D2. Show how the externality affects market efficiency. Use the triangle drawing tool to shade in the new economic surplus (New surplus) or the deadweight loss (Deadweight loss) created by the positive externality. Properly label this shaded area. Carefully follow the instructions above, and only draw the required objects. D, D2 Quantity

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