Figure 10-4

-Refer to Figure 10-4.Which quantity represents the social optimum for this market
A)Q₁
B)Q₂
C)Q₃
D)Q₄

Name: Figure 10-4 -Refer to Figure 10-4.Which quantity represents the social optimum for this market A)Q₁ B)Q₂ C)Q₃ D)Q₄
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Question

Figure 10-4
 
-Refer to Figure 10-4.Which quantity represents the social optimum for this market
A)Q₁ 
B)Q₂ 
C)Q₃ 
D)Q₄

Quizplus · Accepted Answer

The social optimum is the quantity where the marginal social benefit equals the marginal social cost. At Q3, the marginal social benefit (MSB) is equal to the marginal social cost (MSC), so Q3 is the social optimum.

Figure 10-4 -Refer to Figure 10-4.Which Quantity Represents the Social Optimum for the Social