If a good has zero external costs, then
A) marginal social cost equal marginal private cost.
B) marginal social cost is greater than marginal private cost.
C) marginal social cost is less than marginal private cost.
D) we need more information to determine the relationship between private and social costs.

Question

Quizplus · Accepted Answer

When a good has zero external costs, the marginal social cost, which includes both private and external costs, is equal to the marginal private cost, as there are no additional external costs to consider.

If a Good Has Zero External Costs, Then