Figure 15.3 -Refer to Figure 15.3.The size of marginal external benefits can be determined by A)the demand curve D₂. B)D₂ + D₁at each output level C)D₂ - D₁at each output level. D)the demand curve D₁.

Question

Quizplus · Accepted Answer

The marginal external benefits can be determined by the difference between the social value of the good (including external benefits) and the private value of the good. This is represented by the difference between two demand curves at each output level, which is option C.

Figure 15.3 -Refer to Figure 15.3.The Size of Marginal External Benefits Can