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I don't understand how the MSC shifts to the left if it is bigger than the MPC. I know that when supply shifts to the right it increases, so how does MSC shift to the left if it is bigger?
The MSC doesn’t SHIFT to the left! It just so happens that at every quantity produced, the cost to society is greater than the cost to the producer, MSC is higher than MPC, there is no SHIFT, just a mismatch or divergence.
The price on the y axis should reflect both the cost and benefit of the product! But there’s an external cost not reflected in the price, that’s why MSC is greater than MPC
Thanks man, really helping me out
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thank you, econ guru!! your materials are very helpful in revising the ib econ concepts :))
You’re absolutely welcome!
If you’d like to join a group Zoom to review microeconomics before the final exam, you can click on this link:
www.buymeacoffee.com/ibeconguru/e/135972
thank you very much
Top G
I don't understand how the MSC shifts to the left if it is bigger than the MPC. I know that when supply shifts to the right it increases, so how does MSC shift to the left if it is bigger?
The MSC doesn’t SHIFT to the left! It just so happens that at every quantity produced, the cost to society is greater than the cost to the producer, MSC is higher than MPC, there is no SHIFT, just a mismatch or divergence.
The price on the y axis should reflect both the cost and benefit of the product! But there’s an external cost not reflected in the price, that’s why MSC is greater than MPC
@@ibeconguru Thank you so much for clarifying! You have saved me in many exams and possibly for tomorrow's papers 1 and 3 :)
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