Consider the market illustrated in the figure to the right. Supply curve Upper S 1 represents the private cost of production and demand curve Upper D 1 represents the private benefit from consumption. Suppose production of this good creates a negative externality... Show how the externality affects the market. ​1.) Use the line drawing tool to draw either a new supply ​(Upper S 2) or demand ​(Upper D 2) curve incorporating the negative externality in production . Properly label this line.   ​2.) Use the point drawing tool to indicate the market equilibrium price and quantity. Label this point​ 'Market equilibrium'.   ​3.) Use the point drawing tool to indicate the efficient equilibrium price and quantity. Label this point​ 'Efficient equilibrium'. Carefully follow the instructions​ above, and only draw the required objects.

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