If at the current market equilibrium level of production, the marginal social benefit from consuming the product exceeds the marginal social cost of producing it: Social economic efficiency is improved if the government raises the price to consumers until the marginal benefit to society equals the marginal cost to society. The market equilibrium has reached a socially efficient level of output. Social economic efficiency is improved if more of the product is produced. Social economic efficiency is improved if less of the product is produced.

If at the current market equilibrium level of production, the marginal social benefit from consuming the product exceeds the marginal social cost of producing it: Social economic efficiency is improved if the government raises the price to consumers until the marginal benefit to society equals the marginal cost to society. The market equilibrium has reached a socially efficient level of output. Social economic efficiency is improved if more of the product is produced. Social economic efficiency is improved if less of the product is produced.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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