Figure 10-11 -Refer to Figure 10-11. The socially optimal quantity of output is A)240 units, since the value to the buyer of the 240^th unit is equal to the cost incurred by the seller of the 240^th unit. B)240 units, since the value to society of the 240^th unit is equal to the cost incurred by the seller of the 240^th unit. C)420 units, since the value to the buyer of the 420^th unit is equal to the cost incurred by the seller of the 420th unit. D)420 units, since the value to society of the 420^th unit is equal to the cost incurred by the seller of the 420^th unit.

Question

Quizplus · Accepted Answer

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

Figure 10-11 -Refer to Figure 10-11. the Socially Optimal Quantity of Output