In micro economics, why do the marginal social BENEFIT curve and the marginal private BENEFIT curve parallel in a positive externality, and in a negative externality the marginal social COST cirve and marginal private COST curves diverge? Please help, Thanks alot! =)
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They dont have to. You could draw them however you want, as long as they are different. I supposes texts do that to make a point, especially in regards to cost. That is, the more units produced, the greater the difference between private and social cost.
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