In the presence of no externalities,
A) social marginal cost exceeds private marginal cost.
B) social marginal cost is less than private marginal cost.
C) social marginal cost equals private marginal cost.
D) social marginal cost and private marginal cost cannot be compared.

Question

Quizplus · Accepted Answer

In the absence of externalities, the social cost and private cost of producing a good or service are the same. Therefore, social marginal cost equals private marginal cost.

In the Presence of No Externalities