The difference between the marginal social benefit curve and the market demand curve is the:
A)additional cost of producing an additional good.
B)marginal external cost.
C)marginal benefit to the consumers of the good.
D)marginal external benefit.

Question

Quizplus · Accepted Answer

The marginal social benefit curve takes into consideration the positive externalities that are not captured by the market demand curve. The difference between the two is the marginal external benefit, which is represented by the vertical distance between the two curves.

The Difference Between the Marginal Social Benefit Curve and the Market