Ask Question
17 June, 11:28

If there are external benefits associated with the consumption of a good or service:a. The private demand curve will underestimate the true demand curveb. The market demand curve will be the vertical summation of the individual demand costsc. The private demand curve will overestimate the true demand curved. Consumers will be willing to pay for all these benefits in private markets

+3
Answers (1)
  1. 17 June, 11:46
    0
    The correct answer is letter "A": The private demand curve will underestimate the true demand curve.

    Explanation:

    External benefits are given when the consumption of a good or service has positive effects on third parties. The situation implies that there will be more social benefits than private benefits. That is the reason why the private demand curve will underestimate the real demand curve.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If there are external benefits associated with the consumption of a good or service:a. The private demand curve will underestimate the true ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers