The diagram illustrates the marginal private benefit (MPB), the marginal private cost (MPC) and the marginal social cost (MSC) for firms in an industry. The market equilibrium price is shown at point X. What must be done to obtain allocative efficiency?
- Aa decrease in consumption and an increase in price
- Ba decrease in production and no change in price
- Can increase in consumption and a decrease in production
- Dan increase in price and no change in production