Figure 10-10 -Refer to Figure 10-10. The socially optimal quantity of output is A)120 units, since the value to the buyer of the 120^th unit is equal to the cost incurred by the seller of the 120^th unit. B)120 units, since the value to the buyer of the 120^th unit is equal to the cost incurred by society of the 120^th unit. C)160 units, since the value to the buyer of the 160^th unit is equal to the cost incurred by the seller of the 160th unit. D)160 units, since the value to the buyer of the 160^th unit is equal to the cost incurred by society of the 160^th unit.

Question

Quizplus · Accepted Answer

The socially optimal quantity is where the marginal social cost equals the marginal social benefit, which is described in option B.

Figure 10-10 -Refer to Figure 10-10. the Socially Optimal Quantity of Output