The Figure Below Shows the Marginal Benefit to Consumers,MB,the Marginal

question 12

Multiple Choice

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC_P,and the marginal cost to society,MC_S,at each level of output of some good. FIGURE 17-1
-Refer to Figure 17-1.A negative externality is depicted because the

• A)marginal social cost is greater than the marginal social benefit.
• B)marginal social cost is greater than the marginal private cost.
• C)marginal social benefit to consumers is diminishing with greater output.
• D)optimal level of output occurs where marginal private cost is positive.
• E)optimal level of output occurs where marginal private benefit is positive.

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