Figure 10-2

-Refer to Figure 10-2.What is the optimum amount of this product from society's standpoint
A)Q₁
B)Q₂
C)Q₃
D)Q₄

Question

Figure 10-2
 
-Refer to Figure 10-2.What is the optimum amount of this product from society's standpoint
A)Q₁ 
B)Q₂ 
C)Q₃ 
D)Q₄

Quizplus · Accepted Answer

The optimum amount of the product from society's standpoint is where marginal social benefit (MSB) is equal to marginal social cost (MSC). This occurs at Q₂, where the MSB and MSC curves intersect. Any other quantity would result in either a loss of potential benefits (if produced below Q₂) or a waste of resources (if produced above Q₂).

Figure 10-2 -Refer to Figure 10-2.What Is the Optimum Amount of This