Refer to Figure 10-2. If all external costs were internalized, then the market's output would be

A) Q₁.
B) Q₂.
C) Q₃.
D) Q₄.

External Costs

Uncompensated costs incurred by someone who is not involved in the production or consumption of a good or service, typically relating to environmental damage or public health.

Market's Output

The total quantity of goods and services produced and offered for sale in a market during a specific period of time.

Internalized

Describes a process or value that has been incorporated within an individual's psychological framework and is reflected in their behavior or decision-making.