AP MICRO Unit 6 review

Marginal Private Benefit (MPB): The price a consumer is willing to pay to enjoy the benefit of one
extra unit of a good. This is demand because it is the price paid. (D=MPB)

Marginal Social Benefit (MSB): The benefit on society as a whole, from consuming one extra unit of
the good. MSB=MPB+MSB
Marginal Private Cost: The price paid by producer to produce one extra unit of a good. This
is the same as supply because due to law of diminishing returns for the final unit will have
a cost equal to the price, to maximize profits.(S=MPC)

Marginal social cost (MSC): The cost on society as a whole, form consuming one extra unit
of the good. MSC = MPC+MEC