Figure 10-4
-Refer to Figure 10-4. The socially optimal quantity would be
A) Q1.
B) Q2.
C) Q3.
D) Q4.

Name: Figure 10-4 -Refer to Figure 10-4. The socially optimal quantity would be A) Q1. B) Q2. C) Q3. D) Q4.
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Question

Figure 10-4 
-Refer to Figure 10-4. The socially optimal quantity would be
A) Q1. 
B) Q2. 
C) Q3. 
D) Q4.

Quizplus · Accepted Answer

The socially optimal quantity is where marginal social benefit (MSB) equals marginal social cost (MSC). In this graph, that occurs at Q2. At Q2, the MSB is equal to $20 and the MSC is also $20. Therefore, Q2 is the socially optimal quantity.

Figure 10-4 -Refer to Figure 10-4. the Socially Optimal Quantity Would Be