If a Product Has an External Benefit, How Does Its

question 48

Multiple Choice

If a product has an external benefit, how does its marginal private benefit compare to its marginal social benefit?

• A) Marginal private benefit is greater than marginal social benefit.
• B) 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.
• C) 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.
• D) Marginal private benefit cannot be compared to marginal social benefit.
• E) Marginal private benefit is less than marginal social benefit.

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