Figure 10-4 -Refer to Figure 10-4. At Q₃ A)the marginal consumer values this product less than the social cost of producing it. B)every consumer values this product less than the social cost of producing it. C)the cost to society is equal to the value to society. D)the marginal consumer values this product more than the private cost.

Question

Quizplus · Accepted Answer

At Q₃, the marginal consumer's willingness to pay (WTP) for the product is less than the social cost of producing it. This means that the production and consumption of this product generate negative externalities, causing a deadweight loss to society.

Figure 10-4 -Refer to Figure 10-4. at Q3

Figure 10-4 -Refer to Figure 10-4. at Q₃