The marginal social benefit curve (MSB) is downward sloping to the right because early units obtained of a particular government activity (environmental controls to protect air quality, for instance) provide much greater benefits per unit than the benefits provided by later units.

Question

Quizplus · Accepted Answer

The MSB curve is downward sloping because the additional benefit from each additional unit of the activity decreases as more units are provided, reflecting diminishing marginal returns.

The Marginal Social Benefit Curve (MSB) Is Downward Sloping to the Right