February/March 2026 Paper 32

2026 · 30 questions · 30 parts · 30 marks

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6ExternalitiesMedium1 mark
The diagram shows the private and social costs and benefits of producing a good.
diagram of the marginal private and social costs and benefits of producing a good: a marginal private benefit line and a marginal social benefit line both sloping down from the price axis, and a marginal private cost line and a marginal social cost line both sloping up from the origin; four quantities A, B, C and D are marked close together on the quantity axis at the points where these lines cross
Which quantity is most likely to be produced by a firm operating under free market conditions?