If a good has an external cost, then the marginal private cost curve
A) lies below the marginal social cost curve.
B) is negative.
C) lies above the marginal social cost curve.
D) is the same as the marginal external cost curve.

Question

Quizplus · Accepted Answer

When a good has an external cost, the marginal private cost curve lies below the marginal social cost curve because the marginal social cost includes both the private costs and the external costs.

If a Good Has an External Cost, Then the Marginal