The socially efficient scale maximizes the net social benefits from a project because
A)consumer preferences as revealed in market prices are maximized where MAC=MDC.
B)damages are minimized where MAC=MDC.
C)total abatement costs are less that total damage costs where MAC=MDC.
D)net social benefits are maximized where MAC = MDC.

Question

Quizplus · Accepted Answer

Net social benefits are maximized where the marginal abatement cost (MAC) equals the marginal damage cost (MDC), as this is the point where the cost of reducing pollution equals the benefit from the reduction, leading to optimal resource allocation.

The Socially Efficient Scale Maximizes the Net Social Benefits from a Project