If a product has an external benefit, how does its marginal private benefit compare to its marginal social benefit?
A) Marginal private benefit is less than marginal social benefit.
B) Marginal private benefit is greater than marginal social benefit.
C) At low quantities, marginal private benefit is less than marginal social benefit but at high quantities, marginal private benefit is greater than marginal social benefit.
D) At low quantities, marginal private benefit is greater than marginal social benefit but at high quantities, marginal private benefit is less than marginal social benefit.
E) Marginal private benefit cannot be compared to marginal social benefit.
A
You might also like to view...
Monetarist economists might conclude that the accelerator hypothesis supports their position via fiscal policy since
A) the gap between the desired capital stock and the existing capital stocks is closed slowly. B) a change in expected sales will not increase output. C) V? will be smaller than expected. D) All of the above are correct.
Other things the same, which bond would you expect to pay the highest interest rate?
a. a bond issued by the U.S. government b. a bond issued by Microsoft Corporation c. a bond issued by the state of Montana d. a bond issued by a new chain of Brazilian-style restaurants