The socially optimal rate of growth is ?
Correct answer: C. Where the marginal social benefit = the marginal social cost
- A. Zero
- B. Negative
- C. Where the marginal social benefit = the marginal social cost
- D. Total social costs are minimised
Explanation
Growth is socially optimal when the additional social benefit from more growth equals its additional social cost. At that point, further growth would cost more than the benefit it creates.
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