Use the following diagram to answer the following questions.

-Refer to Diagram 10-1. When marginal social costs are equal to MSC2, which is true?

Question

Use the following diagram to answer the following questions.
 
-Refer to Diagram 10-1. When marginal social costs are equal to MSC2, which is true?

Quizplus · Accepted Answer

When marginal social costs are equal to MSC2, it implies that all external costs and benefits are accounted for, making the socially efficient level of education equal to the equilibrium quantity. This situation suggests no additional external benefits from more education, thus no compelling argument for government subsidization, as the market has already reached a socially optimal outcome.

Use the Following Diagram to Answer the Following Questions