Final answer:
The social benefit curve would be positioned above the private benefit curve in a market with a positive externality, as it includes benefits to third parties not captured by market demand.
Step-by-step explanation:
When a positive externality is present in a market, the social benefit curve would lie above the private benefit curve. This is because the market demand curve reflects only the private benefits to consumers, not including the additional benefits that spill over to third parties, which are termed social benefits. An example of a market with positive externalities is the market for flu vaccinations, where the private benefit of getting a flu shot is personal immunity, while the social benefit includes reduced transmission of the flu to others, creating a healthier society overall. The market tends to produce less than the socially optimal quantity (QMarket) due to not accounting for the positive externality. However, if a subsidy is provided equal to the marginal social benefit minus the marginal private benefit, the quantity can increase to a socially optimal level (QSocial), aligning private incentives with the social good.