How is deadweight loss represented on a supply and demand graph in the presence of externalities?

• A. Deadweight loss is not represented on a supply and demand graph.
• B. Deadweight loss is represented by the area above the demand curve.
• C. Deadweight loss is represented by the area below the supply curve.
• D. Deadweight loss is represented by the area between the efficient equilibrium and the market equilibrium.

Answer: (D)