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Author Question: The diagram below shows the private and social marginal costs (MCPandMCS) and the social marginal ... (Read 28 times)

krabuske

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The diagram below shows the private and social marginal costs (MCP and MCS) and the social marginal benefits (MBS) of producing disposable diapers.



FIGURE 17-2

Refer to Figure 17-2. The net social benefit derived from the production and use of the last unit of disposable diapers is


◦ at a maximum at Q1, because that is where MCS equals MBS.
◦ zero at Q2, because that is where the externality is fully maximized.
◦ zero at Q0, because that is where MCS equals MBS.
◦ at a maximum at Q0, because that is where MCS equals MBS.
◦ at a minimum at Q0, because MCS exceeds MCP.


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Marked as best answer by krabuske on Oct 12, 2022

reactx

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krabuske

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Reply 2 on: Oct 12, 2022
Great answer, keep it coming :)


Viet Thy

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Reply 3 on: Yesterday
:D TYSM

 

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