To maximize total welfare,one must equate ________ with ________.
A) total social benefit; total social cost
B) marginal social benefit; total social cost
C) total social benefit; marginal social cost
D) marginal social benefit; marginal social cost

Question

Quizplus · Accepted Answer

To maximize total welfare, we need to consider the marginal social benefit (MSB) and marginal social cost (MSC), as at the equilibrium where MSB=MSC, welfare is maximized. Equating total social benefit with total social cost might not be efficient as it may not reflect the marginal decisions made by individuals. Therefore, option D is correct.

To Maximize Total Welfare,one Must Equate ________ with ________

To Maximize Total Welfare,one Must Equate with