Marginal private cost plus marginal external cost equals _____ cost.

Question

Quizplus · Accepted Answer

Marginal private cost refers to the cost incurred by the producer, whereas marginal external cost refers to the cost incurred by third parties who are not involved in the production or consumption of the good or service. Marginal social cost is the sum of these two costs and represents the total cost to society of producing one more unit of the good or service. Therefore, the correct answer is marginal social cost.

Marginal Private Cost Plus Marginal External Cost Equals _____ Cost