-Refer to the diagram above.If this market has no externalities,the marginal social cost from consuming this good at the competitive equilibrium output level is
A) either greater than or less than P0,depending on the elasticity of supply.
B) greater than P0.
C) less than P0.
D) equal to P0.
E) either greater than or less than P0,depending on the elasticity of demand.

Question

-Refer to the diagram above.If this market has no externalities,the marginal social cost from consuming this good at the competitive equilibrium output level is
A) either greater than or less than P0,depending on the elasticity of supply. 
B) greater than P0. 
C) less than P0. 
D) equal to P0. 
E) either greater than or less than P0,depending on the elasticity of demand.

Quizplus · Accepted Answer

In a market with no externalities, the marginal social cost equals the market price at the competitive equilibrium, which is P0.

-Refer to the Diagram Above