Production and consumption in the cigarette market is too high because
A)Producers do not care about the health of their customers
B)MPC is greater than the MSC
C)MPB is greater than MSB
D)MSB is greater than MPB
E)MPB is less than MSB

Question

Quizplus · Accepted Answer

The production and consumption in the cigarette market is too high because the marginal private benefit (MPB) is greater than the marginal social benefit (MSB), indicating a negative externality where the social costs are not fully accounted for by consumers.

Production and Consumption in the Cigarette Market Is Too High