Demand, Supply, and Externalities DEMAND SUPPLY Marginal Private Marginal Marginal Private Marginal Private Output Benefit (MPB) Social Benefit Output Cost (MPC) Cost - Subsidy 1 $1,000 $1,200 $ 600 $ 400 $900 $1, 100 2 $ 700 $ 500 $800 $1,000 3 $ 800 $ 600 OUT A W N $700 $900 4 $ 900 $ 700 $600 $800 15 $1,000 $ 800 $500 $700 6 $1, 100 $ 900 In the table above, the smart choice for society would be an output of units