The horizontal axis plots the quantity as the number of satellites. It ranges from 0 to 400 in increment of 100. The vertical axis plots the marginal social cost and marginal social benefit, in billions of dollars per satellite. It ranges from 0 to 30 in increment of 5. A line labeled as MSC is drawn diagonally upward. Another line labeled as MSB is drawn diagonally downward. The two lines intersect at a point, labeled as MSC=MSB. The coordinates of this point are (200,15).

The two intersecting lines divide the graph into two areas, marked as “MSB greater than MSC” where the marginal social benefit is greater, and “MSC greater than MSB” where the marginal social cost is greater. From the point of intersection of these lines, dotted lines are drawn ...

Get Foundations of Economics, 8th Edition now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.