The marginal social cost of a common resource is than an individual's marginal cost, and without government intervention the market will allow provision of of the
Common resource than is socially optimal.
A)less; more
B)less; less
C)greater; more
D)greater; less

Question

Quizplus · Accepted Answer

The marginal social cost of a common resource is greater than an individual's marginal cost because individuals do not account for the external costs imposed on others. Without government intervention, the market will allow provision of more of the common resource than is socially optimal, leading to overuse and potential depletion.

The Marginal Social Cost of a Common Resource Is Than