Refer to Figure 19.5.1 above. To bring this industry to produce the socially optimal level of output, there must be a correction:

A) equal to the size of the MEC at Q₁.
B) equal to the sum of MSC and MC.
C) sufficient to reduce output to Q₃.
D) All of the above are equivalent.

Socially Optimal Level

The socially optimal level refers to an outcome in production or activity where the social benefits are maximized and social costs minimized, often achieved through proper regulation or market mechanisms.

Output

The amount of goods or services produced by a company, industry, or economic system.

Industry

A group of companies or businesses that produce similar goods or services and compete within the same market.