Asked by Jasleen Sekhon on Jul 25, 2024
Verified
Marginal social cost is the difference between the marginal cost and the marginal damage cost.
Marginal Damage Cost
The additional cost incurred from producing one more unit of a good or service, which often relates to the negative externalities or damages caused by the increase in production.
Marginal Cost
The increase in total production cost that results from making one additional unit of a product.
- Understand the concept of externalities and their impact on social welfare.
Verified Answer
CC
Chelsea CarterJul 31, 2024
Final Answer :
False
Explanation :
Marginal social cost is the sum of the marginal private cost (the cost to the producer) and the marginal external cost (the cost of the negative externalities borne by society).
Learning Objectives
- Understand the concept of externalities and their impact on social welfare.