IB Economics HL 2.8.1 Socially optimum output
IB Economics HL 2.8.1 Socially optimum output
Students practise identifying the socially optimum output level using data tables or diagrams that show marginal private and social benefits and costs.
How this is tested
- identify the output where community surplus is maximised using marginal benefit and cost data
- explain why equilibrium at MPB = MPC fails to achieve allocative efficiency when externalities exist
- interpret a diagram showing MSC and MSB curves to locate the socially optimum quantity