Use the table below to answer the following questions.
Table 15.2.1
-Refer to Table 15.2.1.Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer.Assume the market is perfectly competitive.If the market is unregulated,the marginal
A)social cost equals the marginal private benefit.
B)private cost is less than the marginal social benefit.
C)private cost equals the marginal social benefit.
D)social cost equals the marginal private cost.
E)private cost is greater than the marginal social benefit.

Question

Use the table below to answer the following questions.
Table 15.2.1 
-Refer to Table 15.2.1.Given in the table are the marginal private cost and the marginal social cost of the production of chemical fertilizer and the marginal social benefit from the consumption of fertilizer.Assume the market is perfectly competitive.If the market is unregulated,the marginal
A)social cost equals the marginal private benefit. 
B)private cost is less than the marginal social benefit. 
C)private cost equals the marginal social benefit. 
D)social cost equals the marginal private cost. 
E)private cost is greater than the marginal social benefit.

Quizplus · Accepted Answer

In a perfectly competitive market, if unregulated, the equilibrium is reached where marginal private cost (MPC) equals the marginal social benefit (MSB), as firms produce where their cost of producing an additional unit equals the price (benefit) consumers are willing to pay.

Use the Table Below to Answer the Following Questions