There are external costs involved when the marginal private cost of production is?

Question

higher than the marginal social cost of production.
equal to the marginal social cost of production.
higher than the marginal variable cost of production.
lower than the marginal fixed cost of production.
lower than the marginal social cost of production.

Answer 1

Lower than the marginal social cost of production. This is called an externality. Since the cost that the private firm bears is lower than the total cost to society, then society must be bearing a piece of the cost too. Thus, the marginal private cost is lower than the marginal social cost.

Answer 2

last one. the difference between private and social costs is exactly the external cost.