Refer to the figure below. The socially optimal quantity of paper is ______ tons per year.
A)0
B)360
C)150
D)300

Question

Refer to the figure below. The socially optimal quantity of paper is ______ tons per year. 
A)0 
B)360 
C)150 
D)300

Quizplus · Accepted Answer

The socially optimal quantity of paper is where marginal social cost (MSC) intersects with marginal social benefit (MSB). This occurs at Qs = 300 tons per year. At this quantity, the total cost to society (shown by the MSC curve) equals the total benefit to society (shown by the MSB curve), resulting in the most efficient use of resources.

Refer to the Figure Below