Refer to Figure 18.6.1 above. The marginal social benefit of consumption of this nonrival good equals the marginal cost when the benefits are:

A) $1.50.
B) $4.00.
C) $5.50.
D) $7.00.

Question

Refer to Figure 18.6.1 above. The marginal social benefit of consumption of this nonrival good equals the marginal cost when the benefits are:A)  $1.50.B)  $4.00.C)  $5.50.D)  $7.00.

Tahir Ali Samanani · Accepted Answer

Final Answer : C, Explanation :  The marginal social benefit intersects with the marginal cost curve at an output level of 8 units. At this output level, the marginal cost is $5.50 and the marginal social benefit is also $5.50. Therefore, the best choice would be to produce and consume 8 units of the nonrival good.

Refer to Figure 18.6.1 above. The marginal social benefit of consumption of this nonrival good equals the marginal cost when the benefits are:

A) $1.50.
B) $4.00.
C) $5.50.
D) $7.00.

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