Turn on thread page Beta
    • Thread Starter

    For a positive consumption externality, the MSB is greater than the MPB and the MPC = MSC. Hence the good is under-consumed. I don't understand why the socially optimal price is hence greater than the free market price. If the good is under-consumed shouldn' the socially optimal price be lower??

    Many thanks in advance
Submit reply
Turn on thread page Beta
Updated: February 7, 2018
The home of Results and Clearing


people online now


students helped last year

University open days

  1. Bournemouth University
    Clearing Open Day Undergraduate
    Fri, 17 Aug '18
  2. University of Bolton
    Undergraduate Open Day Undergraduate
    Fri, 17 Aug '18
  3. Bishop Grosseteste University
    All Courses Undergraduate
    Fri, 17 Aug '18
Will you be tempted to trade up and get out of your firm offer on results day?

The Student Room, Get Revising and Marked by Teachers are trading names of The Student Room Group Ltd.

Register Number: 04666380 (England and Wales), VAT No. 806 8067 22 Registered Office: International House, Queens Road, Brighton, BN1 3XE

Write a reply...
Reputation gems: You get these gems as you gain rep from other members for making good contributions and giving helpful advice.