The following table shows the costs and benefit of producing a commodity. Table 13.1
According to Table 13.1, at the social equilibrium:

Question

The following table shows the costs and benefit of producing a commodity. Table 13.1
 According to Table 13.1, at the social equilibrium:

Quizplus · Accepted Answer

At the social equilibrium, the marginal cost equals the marginal benefit. From the table, we can see that the marginal cost of producing 3 units is $3 and the marginal benefit is also $3. For any other amount of output, the marginal cost and/or marginal benefit would not be equal, meaning there would either be underproduction (where marginal benefit is greater than marginal cost) or overproduction (where marginal cost is greater than marginal benefit). Therefore, 3 units is the best choice for production at the social equilibrium.

The Following Table Shows the Costs and Benefit of Producing