At the quantity of 1000 tacos, the marginal social benefit of a taco is $.50 and the marginal social cost is $.60. To produce the efficient quantity of tacos
A) more tacos should be produced.
B) fewer tacos should be produced
C) there should be no change in the amount of tacos produced.
D) More information on production costs is needed to determine the efficient level of tacos.

Question

Quizplus · Accepted Answer

The efficient quantity is achieved when the marginal social benefit equals the marginal social cost. Since the marginal social cost ($.60) is greater than the marginal social benefit ($.50), fewer tacos should be produced to reach efficiency.

At the Quantity of 1000 Tacos, the Marginal Social Benefit