Government intervention in a particular industry is unnecessary if each of the industry's firms is operating where

Question

Quizplus · Accepted Answer

If marginal social benefit is equal to marginal social cost, then the industry is operating at the socially optimal level of output, meaning that any further government intervention is unnecessary. This is because the negative externality associated with overproduction or the positive externality associated with underproduction has been eliminated, resulting in an efficient allocation of resources.

Government Intervention in a Particular Industry Is Unnecessary If Each