Refer to the above supply and demand graph. Point A represents the current equilibrium level of output of this product and point B represents the optimal level of output from society's perspective. This supply and demand graph indicates that there is(are):

A. an overallocation of resources to the production of this product.
B. a negative externality from the production of this product.
C. spillover benefits to the production of this product.
D. spillover costs to the production of this product.


Answer: C

Economics

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