The Following Questions Refer to the graph below. -Social well-being would be enhanced if output of the water-using firm were to A)Increase from the equilibrium output B)Decrease from the equilibrium output C)Be equal to the equilibrium output D)Be greater than Q₃ E)Be less than Q1

Question

Quizplus · Accepted Answer

Social well-being is maximized when the marginal social benefit of water use is equal to the marginal social cost of water use. At the equilibrium output, the marginal social benefit of water use is equal to the marginal social cost of water use. Therefore, social well-being would be enhanced if output of the water-using firm were to increase from the equilibrium output.

The Following Questions Refer to the Graph Below