Homework SourseThe marginal private cost to a firm of producing the 10th un
The marginal private cost to a firm of producing the 10th unit of output is $100. The marginal damage cost of the 10th unit of output is $25. The marginal social cost of the 10th unit of output is
$75
$25
indeterminate from the given information
$125
| A. | $75 | |
| B. | $25 | |
| C. | indeterminate from the given information | |
| D. | $125 |
Solution
Marginal Social Cost = Marginal Private Cost + Marginal External Cost
Therefore , MSC = 100 + 25 = 125$
