The efficient quantity of output of a product with external costs of production is
A) where the demand curve and the producer's supply curve intersect.
B) where the marginal social cost curve and marginal social benefit curve intersect.
C) as low as possible.
D) zero.

Question

Quizplus · Accepted Answer

The efficient quantity of output accounts for external costs, which is achieved where the marginal social cost (MSC) equals the marginal social benefit (MSB).

The Efficient Quantity of Output of a Product with External