If the marginal social benefit exceeds the marginal social cost of producing the next kilowatt hour of electricity, then it is efficient to produce as many kilowatt hours as possible.

Question

Quizplus · Accepted Answer

When the marginal social benefit exceeds the marginal social cost, it is efficient to increase production until the two are equal, not to produce as many as possible.

If the Marginal Social Benefit Exceeds the Marginal Social Cost