The marginal cost of producing a good to society is the:
A) horizontal sum of the supply curve and the marginal cost of polluting.
B) vertical sum of the demand curve and the marginal cost of polluting.
C) horizontal sum of the demand curve and the marginal cost of polluting.
D) vertical sum of the supply curve and the marginal cost of polluting.

Question

Quizplus · Accepted Answer

The marginal cost of producing a good to society is the vertical sum of the supply curve and the marginal cost of polluting. This is because the supply curve represents the private cost to firms of producing the good, while the marginal cost of polluting represents the external cost imposed on society as a whole. The vertical sum of these two costs reflects the total cost to society of producing the good, which is what the marginal cost represents.

The Marginal Cost of Producing a Good to Society Is