The marginal social cost curve is obtained graphically by ….
A) Horizontally adding the marginal private and marginal external cost curves.
B) Vertically adding the marginal private and marginal external cost curves.
C) Horizontally multiplying the marginal private and marginal external cost curves.
D) Vertically multiplying the marginal private and marginal external cost curves.
E) None of the above

Question

Quizplus · Accepted Answer

The marginal social cost curve is obtained by vertically adding the marginal private cost and the marginal external cost curves. This reflects the total cost to society, combining the private costs incurred by producers and the external costs borne by others.

The Marginal Social Cost Curve Is Obtained Graphically by …