The graph below illustrates the market for a mystery good or service, including its Demand or Marginal Private Benefit (MPB), Marginal Private Cost (MPC), and Marginal Social Cost (MSC). MSC S=MPC 12 P3 P 15 18 21 D=MPB Q Q1 Q2 24 Which of the following statements best describes this type of market? 27 This is a market featuring a negative externality. The size of the external cost is P3 - P1. 30 This is a market featuring a negative externality. The size of the external cost is P3 - P2. 33 This is a market featuring a negative externality. The size of the external cost is P2 - P1. This is a market featuring a positive externality. The size of the external cost is P3 - P2. T 2a

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