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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

Respuesta :

Answer:

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.

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