Consider an industry that produces an output Q with marginal private cost (MC) and marginal social cost (MSC) as given in the table: Which of the following is TRUE?
A) The production of each additional unit results in a larger marginal external cost.
B) The production of each additional unit results in the same marginal external cost.
C) The production of each additional unit results in a lower marginal external cost.
D) There are no marginal external costs associated with the production of this good.

Question

Consider an industry that produces an output Q with marginal private cost (MC) and marginal social cost (MSC) as given in the table:  Which of the following is TRUE?
A) The production of each additional unit results in a larger marginal external cost. 
B) The production of each additional unit results in the same marginal external cost. 
C) The production of each additional unit results in a lower marginal external cost. 
D) There are no marginal external costs associated with the production of this good.

Quizplus · Accepted Answer

The Answer of Consider an industry that produces an output Q with marginal private cost (MC) and marginal social cost (MSC) as given in the table:  Which of the following is TRUE?
A) The production of each additional unit results in a larger marginal external cost. 
B) The production of each additional unit results in the same marginal external cost. 
C) The production of each additional unit results in a lower marginal external cost. 
D) There are no marginal external costs associated with the production of this good.

Consider an Industry That Produces an Output Q with Marginal