To maximize net benefit to society from an activity, its:
A) social marginal benefits must equal its social marginal costs.
B) private marginal benefits must equal its social marginal costs.
C) social marginal benefits must equal its private marginal costs.
D) private marginal benefits must equal its private marginal costs.

Question

Quizplus · Accepted Answer

The principle of maximizing net benefit to society from an activity is achieved when the social marginal benefits (the additional benefits to society) equal the social marginal costs (the additional costs to society). This ensures that the activity is producing at a level where the overall benefit to society is maximized, taking into account both the private and external effects.

To Maximize Net Benefit to Society from an Activity, Its