Assuming no externalities and a competitive environment, the marginal private cost is equal to the marginal social cost.

Question

Quizplus · Accepted Answer

In a competitive environment, firms will produce where marginal cost equals price. Since the market price is equal to the marginal social benefit, and assuming no externalities, the marginal private cost is equal to the marginal social cost. Therefore, the statement is true.

Assuming No Externalities and a Competitive Environment, the Marginal Private