Marginal social cost minus marginal external cost equals

Question

Quizplus · Accepted Answer

Marginal social cost (MSC) is the total cost to society of producing an additional unit of a good, including both the private costs borne by the producer and any external costs to other members of society. Marginal external cost (MEC) is the cost of producing an additional unit of a good that falls on people other than the producer, such as pollution. Therefore, MSC minus MEC equals the marginal private cost (MPC), which is the cost borne by the producer alone.

Marginal Social Cost Minus Marginal External Cost Equals