If the market supply and demand curves for a common resource include all costs and benefits, the common resource will:
A) be underused.
B) be overused.
C) be used at the socially optimal level.
D) impose an external cost on society.

Question

Quizplus · Accepted Answer

The socially optimal level of resource use is where the marginal social benefit equals the marginal social cost. When all costs and benefits are included in the market supply and demand curves, the market will reach this optimal level.

If the Market Supply and Demand Curves for a Common