Which of the following is valid for a “first-best” world?
A.
Social Marginal Benefit (SMB) > Price (P) = Buyer’s Private Marginal Benefit (MB) = Seller’s Private Marginal Cost (MC) = Social Marginal Cost (SMC)
B.
Social Marginal Cost (SMC) > Price (P) = Buyer’s Private Marginal Benefit (MB) = Seller’s Private Marginal Cost (MC) = Social Marginal Benefit (SMB)
C.
Price (P) = Buyer’s Private Marginal Benefit (MB) = Seller’s Private Marginal Cost (MC) = Social Marginal Cost (SMC) = Social Marginal Benefit (SMB)
D.
Social Marginal Benefit (SMB) > Social Marginal Cost (SMC)