If either the production or consumption of a good generates an external cost, then the:
A)social demand curve will lie to the right of the private demand curve.
B)social marginal cost curve will lie to the right of the private marginal cost curve.
C)social marginal cost curve will lie to the left of the private marginal cost curve.
D)social demand for the good will equal zero.

Question

Quizplus · Accepted Answer

If either the production or consumption of a good generates an external cost, then the social marginal cost of the good will be greater than the private marginal cost, implying that the social marginal cost curve will lie to the left of the private marginal cost curve.

If Either the Production or Consumption of a Good Generates