For a common resource,the marginal private cost curve ________ and the marginal social cost curve ________.
A) slopes upward; slopes upward
B) slopes upward; slopes downward
C) slopes downward; slopes upward
D) slopes downward; slopes downward
E) is vertical; is horizontal

Question

Quizplus · Accepted Answer

The marginal private cost curve always slopes upward because as more of a good is produced or consumed, the private cost increases. The marginal social cost, on the other hand, may slope upward or downward depending on whether there are externalities present. In the absence of externalities, the marginal social cost curve also slopes upward like the marginal private cost curve.

For a Common Resource,the Marginal Private Cost Curve ________ and the Marginal