Use the figure below to answer the following questions.

Figure 16.2.2
-Refer to Figure 16.2.2. This figure shows the demand curve, the marginal private cost curve and the marginal social cost curve of good A. Production of the 6th unit of output generates a marginal external
A)cost of $1.50.
B)cost of $3.
C)cost of $6.
D)benefit of $3.
E)benefit of $6.

Question

Use the figure below to answer the following questions.
  
Figure 16.2.2
-Refer to Figure 16.2.2. This figure shows the demand curve, the marginal private cost curve and the marginal social cost curve of good A. Production of the 6th unit of output generates a marginal external
A)cost of $1.50. 
B)cost of $3. 
C)cost of $6. 
D)benefit of $3. 
E)benefit of $6.

Quizplus · Accepted Answer

The marginal external cost is the difference between the marginal social cost and the marginal private cost. If the marginal social cost is $3 higher than the marginal private cost for the 6th unit, then the marginal external cost is $3.

Use the Figure Below to Answer the Following Questions