The marginal private benefit curve (MB)is a negatively-sloped straight line.If marginal external benefit decreases as output increases,the marginal social benefit curve is a negatively-sloped straight line
A)parallel to and above the MB curve.
B)parallel to and below the MB curve.
C)above the MB curve and steeper than the MB curve.
D)above the MB curve and flatter than the MB curve.
E)below the MB curve and flatter than the MB curve.

Question

Quizplus · Accepted Answer

When the marginal external benefit decreases as output increases, the marginal social benefit curve will be flatter than the marginal private benefit curve but still lie above it. Therefore, the correct answer is C: above the MB curve and steeper than the MB curve.

The Marginal Private Benefit Curve (MB)is a Negatively-Sloped Straight Line