If at the current market equilibrium level of production, the marginal social benefit from consuming the product exceeds the marginal social cost of producing it: Social economic efficiency is improved if the government raises the price to consumers until the marginal benefit to society equals the marginal cost to society. The market equilibrium has reached a socially efficient level of output. Social economic efficiency is improved if more of the product is produced. Social economic efficiency is improved if less of the product is produced.

If at the current market equilibrium level of production, the marginal social benefit from consuming the product exceeds the marginal social cost of producing it: Social economic efficiency is improved if the government raises the price to consumers until the marginal benefit to society equals the marginal cost to society. The market equilibrium has reached a socially efficient level of output. Social economic efficiency is improved if more of the product is produced. Social economic efficiency is improved if less of the product is produced.

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter4: Markets In Action

Section: Chapter Questions

Problem 17SQ

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