Number 46 46 A market supply curve reflects the A external b

46) A market supply curve reflects the A) external benefits of producing a good or service. B) external costs of producing a good or service. C) social costs of producing a good or service D) private costs of producing a good or service.

Solution

Usually The market supply curve reflects the private costs of producing a good or service. A market supply curve represents social Marginal cost curve only when there is external costs of production i.e. Social Marginal cost = Private Marginal cost + Marginal external cost.

Answer- option D