The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC P ,and the marginal cost to society,MC S ,at each level of output of some good. FIGURE 17-1
-Refer to Figure 17-1.The socially optimal level of output is

Question

The figure below shows the marginal benefit to consumers,MB,the marginal cost to private firms,MC P ,and the marginal cost to society,MC S ,at each level of output of some good.  FIGURE 17-1
-Refer to Figure 17-1.The socially optimal level of output is

Quizplus · Accepted Answer

The socially optimal level of output is typically where the marginal social cost equals the marginal social benefit. In many economic models, this is represented by Q2, where the external costs or benefits are accounted for, leading to an efficient allocation of resources.

The Figure Below Shows the Marginal Benefit to Consumers,MB,the Marginal