Producing paper creates pollution. There is no externality in the consumption of paper. The efficient quantity of paper is when the
A) marginal social benefit of paper is equal to zero.
B) marginal social cost of the pollution from making paper is equal to zero.
C) marginal social benefit of paper is equal to the marginal social cost of paper.
D) marginal private cost of the pollution from making paper is equal to zero.

Question

Quizplus · Accepted Answer

The efficient quantity is achieved when marginal social benefit equals marginal social cost, accounting for all externalities.

Producing Paper Creates Pollution