The concept of 'Social Marginal Cost' is relevant for:
A. Correcting externalities and optimal provision of public goods
B. Only calculating private profits
C. Only determining market prices
D. Private decision making only
Answer: Option A
Solution (By JKSSB Mock Tests)
Social marginal cost includes both private costs and external costs. It is used in the analysis of externalities and in determining the socially optimal level of output.
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