At the quantity of 1000 tacos, the marginal social benefit of a taco is $0.50 and the marginal social cost is $0.60. To produce the efficient quantity of tacos,
A) there should be no change in the amount of tacos produced.
B) more tacos should be produced.
C) fewer tacos should be produced.
D) More information on production costs is needed to determine the efficient level of taco production.

Question

Quizplus · Accepted Answer

When the marginal social cost ($0.60) is higher than the marginal social benefit ($0.50) at a given quantity, it indicates that the cost of producing an additional unit exceeds the benefit derived from it. Therefore, to reach an efficient level of production, fewer tacos should be produced.

At the Quantity of 1000 Tacos, the Marginal Social Benefit