-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals
A) marginal private cost.
B) private cost.
C) external cost.
D) marginal external cost.
E) Coasian cost.

Question

-The figure above shows the marginal social cost curve of generating electricity and the marginal private cost curve.The difference between the marginal cost curve and the marginal social cost curve equals
A) marginal private cost. 
B) private cost. 
C) external cost. 
D) marginal external cost. 
E) Coasian cost.

Quizplus · Accepted Answer

The difference between the marginal social cost curve and the marginal private cost curve represents the marginal external cost. This is because the marginal social cost includes all costs to society (including externalities), while the marginal private cost includes only the costs incurred by the producer. The difference, therefore, is the cost imposed on others that is not accounted for by the private cost, known as the marginal external cost.

-The Figure Above Shows the Marginal Social Cost Curve of Generating