-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.If 5 concerts are put on,then the
A) marginal external cost will be greater than the marginal social cost.
B) marginal external cost will be greater than the marginal private cost.
C) marginal external cost will equal the marginal private cost.
D) marginal social cost will equal the marginal external cost.
E) marginal external cost will equal zero.

Question

-The figure above illustrates the marginal private cost and the marginal social cost to the city of Seattle for each rock concert that is offered.If 5 concerts are put on,then the
A) marginal external cost will be greater than the marginal social cost. 
B) marginal external cost will be greater than the marginal private cost. 
C) marginal external cost will equal the marginal private cost. 
D) marginal social cost will equal the marginal external cost. 
E) marginal external cost will equal zero.

Quizplus · Accepted Answer

The marginal external cost is the difference between the marginal social cost and the marginal private cost. If the marginal social cost is higher than the marginal private cost, as illustrated for any given number of concerts, it indicates that there are external costs not accounted for by the private cost. Therefore, the marginal external cost is greater than the marginal private cost.

-The Figure Above Illustrates the Marginal Private Cost and the Marginal