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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

If the MSC in Example 2 had been $580 instead of $360, what would the socially optimal, or efficient, outcome have been?

To determine

Calculate socially optimal or efficient outcome.

Explanation

The socially optimal or efficient outcome can be determined where the MSB (Marginal Social Benefits) is equal to MSC (Marginal Social Costs).

Table 1 shows MPB (Marginal Private Benefit) of various units of good Y.

Table 1

PersonMPB of First Unit of YMPB of Second Unit of YMPB of ThirdUnit of Y
A400380190
B15011090
C1009080

MSC for each unit is $580...

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