If a product has an external benefit,how does its marginal private benefit compare to its marginal social benefit?
A) Marginal private benefit is less than marginal social benefit.
B) Marginal private benefit is greater than marginal social benefit.
C) At low quantities, marginal private benefit is less than marginal social benefit but at high quantities, marginal private benefit is greater than marginal social benefit.
D) At low quantities, marginal private benefit is greater than marginal social benefit but at high quantities, marginal private benefit is less than marginal social benefit.
E) Marginal private benefit cannot be compared to marginal social benefit.

Question

Quizplus · Accepted Answer

When a product has an external benefit, the marginal social benefit includes both the private benefit and the external benefit, making it greater than the marginal private benefit alone.

If a Product Has an External Benefit,how Does Its Marginal