Suppose that at current consumption levels, the marginal social cost of using the Kansas City freeway system is $15 while the marginal social benefit is $18. In this instance, government officials should:

Question

Quizplus · Accepted Answer

When the marginal social benefit ($18) exceeds the marginal social cost ($15), it indicates that increasing the use of the freeway system would lead to a net social gain. Therefore, actions to increase use would be beneficial.

Suppose That at Current Consumption Levels, the Marginal Social Cost