Social marginal benefit is defined as the private marginal benefit to the consumers plus any costs associated with the consumption of the good that are imposed on others but for which those others are not fully compensated.
What is Marginal benefit?
- Marginal benefit is the additional benefit that a consumer receives from consuming one additional unit of a good or service.
- It is the amount that the total benefit increases when one more unit of a good or service is consumed. It is also referred to as the marginal utility of a good or service.
- There are two types of marginal benefit: private marginal benefit and social marginal benefit.
- Private marginal benefit is the additional benefit that an individual gets from consuming an additional unit of a good or service.
- Social marginal benefit is the additional benefit that society as a whole receives from consuming an additional unit of a good or service.
- Both types of marginal benefit help to explain the demand curves of goods and services and the relationship between price, quantity demanded, and total benefit.
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