The diagram illustrates the marginal private costs (MPC) and marginal private benefits (MPB) for a product. At first, consumers believe that marginal private costs are MPC1 and marginal private benefits are MPB1. What happens to market demand for the product if consumers realise that they had underestimated the MPC of purchasing the product, but not the MPB?
- AThe consumer underconsumes the product by Q1Q2.
- BThe consumer underconsumes the product by Q1Q3.
- CThe consumer overconsumes the product by Q1Q3.
- DThe consumer overconsumes the product by Q1Q4.