. The Figure below shows a market with an externality. The current market equilibrium output of Q1 is not the economically efficient output. The economically efficient output is Q2. Price P P t Q Q 25 S Demand In that case, the diagram shows: In that case, A) B) C) D) Quantity the effect of a positive externality in the production of a good. the effect of a negative externality in the production of a good. the effect of an external cost imposed on a producer. the effect of an external benefit such as a subsidy granted to consumers of a good.