The socially efficient scale maximizes the net social benefits from a project.
Net social benefits are maximized where MAC = MDC.

Question

Quizplus · Accepted Answer

This is because when MAC (Marginal Cost) is equal to MDC (Marginal Social Benefit), the marginal benefit of the project is equal to the marginal cost, which means that the net social benefit is maximized. Therefore, the socially efficient scale is achieved where MAC = MDC.

The Socially Efficient Scale Maximizes the Net Social Benefits from a Project