Asked by
christian jones
on Dec 08, 2024
Verified
For the efficient level of output to be produced, marginal
A) private cost must equal zero.
B) benefit must equal marginal private cost.
C) social cost must be zero.
D) benefit must equal marginal social cost.
Marginal Social Cost
The total cost society bears for the production of an additional unit of a product, including both private and external costs.
Marginal Private Cost
The additional cost borne by a producer for producing one extra unit of a good or service.
- Illustrate how the presence of externalities results in the suboptimal distribution of resources in scenarios lacking government action.
- Understand the function of marginal analysis in identifying the optimal level of production and consumption.
Verified Answer
MF
Learning Objectives
- Illustrate how the presence of externalities results in the suboptimal distribution of resources in scenarios lacking government action.
- Understand the function of marginal analysis in identifying the optimal level of production and consumption.