The diagram displays the expected marginal private benefits (MPB), marginal social benefits (MSB), marginal private costs (MPC) and marginal social costs (MSC) for constructing a new road. The government steps in so that the socially desirable output is reached. Which combination identifies the equilibrium output without government intervention and the equilibrium output with government intervention?
- Awithout government intervention: Q4; with government intervention: Q1
- Bwithout government intervention: Q3; with government intervention: Q2
- Cwithout government intervention: Q3; with government intervention: Q4
- Dwithout government intervention: Q4; with government intervention: Q1