If a firm is not forced to take account of a negative externality it creates, it will produce the quantity at which
a. the marginal cost of production equals the marginal private benefit
b. the marginal cost of production equals the marginal social benefit
c. the marginal social cost of production the equals marginal private benefit
d. the marginal social cost of production equals the marginal social benefit
e. price equals marginal social benefit
A
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Refer to Figure 4-1. If the market price is $1.00, what is the consumer surplus on the fourth burrito?
A) $0 B) $0.50 C) $1.50 D) $2.25
Which of the following is NOT a characteristic of a private good?
a. rivalry in consumption b. benefits of consumption are nonexcludable c. consumption of the good precludes consumption by another individual d. the benefits to a consumer of consuming the good are exclusive to that individual