Exhibit 17.5

-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.Point c shows _____
A)the social welfare loss.
B)the optimal level of greenhouse gas emissions for a given rate of output.
C)the total social gain from producing the socially efficient output.
D)the marginal social cost.
E)the marginal social benefit.

Question

Exhibit 17.5
 
-Refer to Exhibit 17.5,which shows greenhouse gas emissions for a given rate of electricity production.Point c shows _____
A)the social welfare loss. 
B)the optimal level of greenhouse gas emissions for a given rate of output. 
C)the total social gain from producing the socially efficient output. 
D)the marginal social cost. 
E)the marginal social benefit.

Quizplus · Accepted Answer

The marginal social cost is the cost to society of producing one more unit of output. In Exhibit 17.5, the marginal social cost is shown by the slope of the MSC curve. Point c is the point where the MSC curve intersects the MRB curve. This is the point where the marginal social cost is equal to the marginal social benefit, which is the optimal level of output.

Exhibit 17.5 -Refer to Exhibit 17.5,which Shows Greenhouse Gas Emissions for a Gas