The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MCP,and the marginal cost to society,MCS,at each level of output of some good.
FIGURE 17- 1
-Refer to Figure 17- 1.The price that leads consumers to demand the socially optimal quantity of output is

Question

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MCP,and the marginal cost to society,MCS,at each level of output of some good.
  FIGURE 17- 1
-Refer to Figure 17- 1.The price that leads consumers to demand the socially optimal quantity of output is

Quizplus · Accepted Answer

The socially optimal quantity of output is where the marginal benefit (MB) curve intersects the marginal cost (MC) curve. In Figure 17-1, this occurs at point E, where the price is P3.

The Figure Below Shows the Marginal Benefit to Consumers,MB,the Marginal