Which of the following equations is correct?
A) MC = MSC + marginal external cost
B) MSC = MC ÷ marginal external cost
C) MSC = MC + marginal external cost
D) MSC = MC × marginal external cost
E) MC = marginal external cost - MSC

Question

Quizplus · Accepted Answer

The correct equation is MSC = MC + marginal external cost, as it states that the Marginal Social Cost (MSC) is equal to the Marginal Private Cost (MC) plus the Marginal External Cost. This equation takes into account the full cost of production, including any external costs imposed on society.

Which of the Following Equations Is Correct