Final answer:
Market demand curves reflect only the private benefits to consumers and not the positive externalities, as these are social benefits received by third parties, not captured in the demand curve.
Step-by-step explanation:
The question deals with whether market demand curves reflect positive externalities. An externality is a cost or benefit for a third party who did not agree to it. A positive externality occurs when the benefit spills over to others who are not directly involved in the transaction. Market demand curves, however, do not include positive externalities. Demand curves usually reflect the private benefits to consumers, meaning the benefits that accrue directly to buyers of the goods or services.
They do not capture the social benefits that may accrue to others. Therefore, positive externalities are not reflected in market demand curves and are instead considered separately in economic analysis of social welfare