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Figure: Marginal Private Benefits and Marginal Social Benefits
-(Figure: Marginal Private Benefits and Marginal Social Benefits) Look at the figure Marginal Private Benefits and Marginal Social Benefits. If government does intervene and encourages the market to produce and price at the socially optimal level, what will be the output and price?

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Use the following to answer questions:
Figure: Marginal Private Benefits and Marginal Social Benefits

-(Figure: Marginal Private Benefits and Marginal Social Benefits) Look at the figure Marginal Private Benefits and Marginal Social Benefits. If government does intervene and encourages the market to produce and price at the socially optimal level, what will be the output and price?

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The socially optimal level is where marginal social benefits equal marginal social costs, which typically results in a higher output and lower price compared to the private market equilibrium.

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