The following graph shows the marginal social cost (MSC), the marginal private cost (MPC), and the marginal social benefit (MSB) of a good. MSC S = MPC my $3.00 $2.50 $2.00 $1.50 $1.00 D = MSB 20 40 60 80 Quantity
The following graph shows the marginal social cost (MSC), the marginal private cost (MPC), and the marginal social benefit (MSB) of a good. MSC S = MPC my $3.00 $2.50 $2.00 $1.50 $1.00 D = MSB 20 40 60 80 Quantity
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The following graph shows the marginal social cost (MSC), the marginal private cost (MPC), and the marginal social benefit (MSB) of a good.
MSC
S = MPC
$3.00
$2.50
$2.00
$1.50
$1.00
D = MSB
40
60
80
Quantity
Which of the following indicate the marginal external cost and the socially optimal quantity?
A
$3.00 and 40 units
$2.50 and 60 units
$2.00 and 40 units
D
$1.00 and 20 units
$1.00 and 80 units
20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F03328d25-a05c-492d-87b7-853d96e3a4d9%2F3f80bc24-ea95-4695-a664-02b20fd37290%2Fhy34h9d_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The following graph shows the marginal social cost (MSC), the marginal private cost (MPC), and the marginal social benefit (MSB) of a good.
MSC
S = MPC
$3.00
$2.50
$2.00
$1.50
$1.00
D = MSB
40
60
80
Quantity
Which of the following indicate the marginal external cost and the socially optimal quantity?
A
$3.00 and 40 units
$2.50 and 60 units
$2.00 and 40 units
D
$1.00 and 20 units
$1.00 and 80 units
20
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