Final answer:
The difference between new marginal cost and marginal benefit is called 'marginal net benefit'. It indicates whether more or less of a good should be produced based on the cost versus the benefit it provides to society. Optimal social equilibrium is achieved when the price equals marginal cost.
Step-by-step explanation:
The difference between the new marginal cost and marginal benefit is known as the marginal decision-making or, more specifically, marginal net benefit. If the marginal benefit exceeds the marginal cost, this indicates that the additional unit of a good or service provides more benefit than it costs to produce, suggesting that production should be increased to maximize the overall benefit to society.
Conversely, if the marginal cost exceeds the marginal benefit, the additional unit costs more to produce than the benefit it provides, suggesting that production should be reduced. Furthermore, an optimal equilibrium for society occurs when the price of the good (P) equals the marginal cost (MC); this condition means that the social costs of producing the good or service are perfectly balanced with the social benefits, ensuring the greatest overall benefit to society.
This is particularly true in a perfectly competitive market, where firms are profit-maximizing and the prices reflect societal willingness to pay.