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The graph represents the market demand and supply for the preschool program Headstart. A graph plots a demand and a supply curve with Quantity of
The graph represents the market demand and supply for the preschool program Headstart. A graph plots a demand and a supply curve with Quantity of students along the horizontal axis and Price along the vertical axis. The supply curve starts at the origin and has a positive slope. The demand curve starts at 450 dollars on price and has a negative slope. The curves intersect at 300 students, 300 dollars. The supply curve passes through the following coordinates for quantity of students and price: 200 students, 200 dollars; 250 students, 250 dollars; 400 students, 400 dollars. The demand curve passes through the following coordinates for quantity of students and price: 100 students, 400 dollars; 400 students, 250 dollars; 500 students, 200 dollars. Why is the socially optimal enrollment more than 300 students? Because preschools create positive external costs. Because preschools generate network externalities. Because preschools create positive external benefits. Because preschools generate technology spillovers
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