Relating to the Economics in Practice on page 329: If a company that is responsible for an environmental disaster does not end up paying the entire cost of the damage it created, the marginal social cost will be ________ the sum of the marginal costs of production.
A) less than
B) greater than
C) equal to
D) unrelated to

Question

Quizplus · Accepted Answer

The marginal social cost includes both the marginal cost of production and the external costs, such as environmental damage. If the company does not pay for the entire damage, the marginal social cost will be greater than the marginal cost of production alone.

Relating to the Economics in Practice on Page 329: If