When does the marginal social cost of producing a good exceed the marginal private cost of producing it?
What will be an ideal response?
If the production of a good generates a negative externality, the marginal social cost of producing the good exceeds the marginal private cost of producing it.
Economics
You might also like to view...
If a firm shuts down in the short run, it will
a. incur losses equal to its fixed costs b. produce at the output level where MC = MR c. reduce its losses to zero d. do this because P > AVC e. have total revenue greater than total fixed costs
Economics
Who conducted the study in the 1940s that surveyed entrepreneurs to determine whether they used marginal analysis in choosing their production levels?
a. Milton Friedman b. Fritz Machlup c. Michael Kalecki d. Richard Lester e. William Baumol
Economics