-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. Based on the data in the table, production of fertilizer has
A) external benefits.
B) external costs.
C) no externalities.
D) constant returns to scale.

Question

-The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. Based on the data in the table, production of fertilizer has
A) external benefits. 
B) external costs. 
C) no externalities. 
D) constant returns to scale.

Quizplus · Accepted Answer

The presence of external costs is indicated by the difference between the marginal social cost and the marginal private cost, suggesting that production imposes costs on others not reflected in the market price.

-The Above Table Shows the Marginal Benefits and Costs from Production