The socially optimal outcome occurs where the _____ benefit equals the _____ cost.

Question

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The socially optimal outcome occurs where the marginal social benefit equals the marginal social cost. This balance ensures that society is maximizing the benefits of the activity without causing any harm to others or the environment. Option C states this correctly. Option A is incorrect because it only considers external costs and benefits, while option B and D address total costs and benefits, which may not accurately reflect the true social costs and benefits of an activity.

The Socially Optimal Outcome Occurs Where the _____ Benefit Equals