All marginal costs, no matter who pays them, are marginal _____ costs.

Question

Quizplus · Accepted Answer

Marginal costs refer to the additional cost of producing one more unit of a good or service. Social marginal costs take into account not only the private cost of production (private marginal costs), but also the costs that are imposed on society as a whole (external marginal costs), such as pollution or traffic congestion. Therefore, all marginal costs are considered social marginal costs since they reflect the total cost of producing one more unit, including both private and external costs.

All Marginal Costs, No Matter Who Pays Them, Are Marginal