-The figure above shows the private marginal cost curve, the social marginal cost curve and the market demand curve. If the market is unregulated, then at the equilibrium output the marginal social cost of production is
A) equal to the marginal private cost of production.
B) less than the marginal benefit to consumers.
C) less than the marginal private cost of production.
D) greater than the marginal benefit to consumers.

Question

-The figure above shows the private marginal cost curve, the social marginal cost curve and the market demand curve. If the market is unregulated, then at the equilibrium output the marginal social cost of production is
A) equal to the marginal private cost of production. 
B) less than the marginal benefit to consumers. 
C) less than the marginal private cost of production. 
D) greater than the marginal benefit to consumers.

Quizplus · Accepted Answer

In an unregulated market with externalities, the social marginal cost is typically higher than the private marginal cost, leading to a situation where the marginal social cost exceeds the marginal benefit to consumers at equilibrium.

-The Figure Above Shows the Private Marginal Cost Curve, the Social