The marginal social cost of production is
A) The sum of the total cost to the producer and the total external cost
B) The sum of the marginal cost to the producer and the total external cost
C) The sum of the total cost to the producer and the marginal external cost
D) The sum of the marginal cost to the producer and the marginal external cost

Question

Quizplus · Accepted Answer

The marginal social cost of production is the sum of the marginal cost to the producer and the marginal external cost. This is because the marginal cost represents the cost of producing additional units of output, while the marginal external cost represents the cost to society of producing those units (such as environmental damage or health impacts). By adding these two costs together, we get the total cost of production to society, which is the marginal social cost.

The Marginal Social Cost of Production Is