At the Current Level of Output, the Marginal Social Cost

question 11

Multiple Choice

At the current level of output, the marginal social cost of paper is $30 per ton and its marginal private cost is $20 per ton. The marginal social benefit from paper is $20 per ton. The market for paper is competitive and unregulated. This means that at the current level of production,

• A) the market for paper is in equilibrium.
• B) the efficient quantity of paper is produced.
• C) there is a shortage of paper.
• D) the quantity of paper produced is less than the efficient level of output.

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