If the production of a good creates pollution, then the
A) marginal social benefit curve lies below the marginal private benefit curve.
B) marginal social benefit curve lies above the marginal private benefit curve.
C) marginal social cost curve lies below the marginal private cost curve.
D) marginal social cost curve lies above the marginal private cost curve.

Question

Quizplus · Accepted Answer

The marginal social cost curve lies above the marginal private cost curve because it includes the external costs of pollution that are not accounted for by the private costs incurred by the producer.

If the Production of a Good Creates Pollution, Then the