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refer to the following diagram. MCs is the firm’s marginal cost of providing safety, while MBs is the marginal benefit to society of a one more unit of safety. Because of imperfect information and costly worker mobility, MBs’ is the firm’s perceived marginal benefit of safety.
-The MCs curve is upward sloping because:
Interest Expense
The cost incurred by an entity for borrowed funds, typically reported on the income statement.
Income Tax Rate
The percentage at which an individual or corporation is taxed on their income.
Return on Equity
A measure of the profitability of a business in relation to the equity, indicating how effectively equity is used to generate profits.
Total Stockholders' Equity
The total amount of funds contributed by investors and the accumulated earnings of a company, less any dividends paid.
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