If the social cost is greater than the private cost in a particular market, the socially optimal equilibrium will exist at a quantity that is _______ the private level.
A)greater than
B)equal to
C)less than
D)either greater than or less than

Question

Quizplus · Accepted Answer

When the social cost is greater than the private cost, it indicates the presence of negative externalities. To achieve the socially optimal equilibrium, the quantity produced and consumed should be reduced compared to the private level, thus aligning with choice C.

If the Social Cost Is Greater Than the Private Cost