Econ question.?

[Giorgos K]

What we have is a deadweight loss. Companies are providing less quantity than the consumers need. This is a monopoly or oligopoly effect (if we had pure competition, market would be at equilibrium). So, private benefits exceed social benefit. At the same time, if positive externalities exist, then consumers would need less quantity (but in your case, consumers need more). If positive externalities exist, then firms would produce less quantity than consumers need, but not "too little" (deadweight loss would be not that big as in your case).

Answer is B.

I hope this helps