when there is a common property resource, why is the marginal social cost greater than the marginal private cost of using the
1 answer:
The production of one unit of goods socially costs more compared to the production of one unit privately.
MSC is greater than MPS because social sector taxes are greater compared to the private sector. In the production of the unit of the social sector, the price unit will be greater than that.
While the private sector is the less marginal private cost because the Unit of production is less as it has to produce at its own level.
As shown in the graph below the tax on social is less but the production cost of the social units will be greater due to the high plant installation and running of one plant will cause greater cost.
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