When there is negative externality in production, a. marginal social benefit exceeds marginal private benefit. b....
When there is negative externality in production,
a. marginal social benefit exceeds marginal private benefit.
b. marginal private benefit exceeds marginal social benefit.
c. marginal social cost exceeds marginal private cost.
d. marginal private cost exceeds marginal social cost.
Homework Answers
Answer
Option c
c. marginal social cost exceeds the marginal private cost.
Marginal social cost = marginal private cost + marginal external cost
so MSC>MPC.
if there is external benefit then MSB>MPB.
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When there is negative externality in production,
a. marginal social benefit exceeds marginal private benefit.
b....
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