At the socially optimal level of output:
A) Private marginal benefit = social marginal cost
B) Social marginal benefit = social marginal cost
C) Social marginal benefit = private marginal cost
D) None of the above

Question

Quizplus · Accepted Answer

At the socially optimal level of output, the social marginal benefit equals the social marginal cost. This ensures that the resources are allocated efficiently from a societal perspective, taking into account both private and external effects.

At the Socially Optimal Level of Output