The diagram illustrates the marginal private costs (MPC) and marginal private benefits (MPB) for a product. At first, consumers think that marginal private costs are at MPC1 and marginal private benefits are at MPB1. What effect will there be on the 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.