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The market for Stardust is perfectly competitive. However, its marginal social costs exceed its marginal private costs.

Graph the market for Stardust, labeling the marginal private benefit (MPB), marginal social benefit (MSB), marginal private cost (MPC), and marginal social cost (MSC).

User MVZ
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The graph for the market for Stardust, labeling the marginal private benefit (MPB), marginal social benefit (MSB), marginal private cost (MPC), and marginal social cost (MSC) is attached accoridngly.

In a perfect competition for Stardust, everyone can buy and sell at the same price.

But when the overall cost to society (like environmental impact) is more than what individuals pay, there's a problem.

This means the real cost of Stardust is higher for everyone when you include the hidden extra costs, like pollution. If nothing changes, it could harm the environment or create other issues.

So, it's like everyone getting a good deal on Stardust individually, but the planet paying a higher cost that we don't see right away.

The market for Stardust is perfectly competitive. However, its marginal social costs-example-1
User Stanislav Smida
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