No individual is willing to pay to provide the efficient level of a public good since the:
A)marginal cost of production is zero.
B)good will be nonrival and thus underconsumed.
C)individual's marginal benefit is less than the marginal social benefit.
D)marginal benefit of allowing one more individual to consume the good is zero.

Question

Quizplus · Accepted Answer

This is the typical free-rider problem associated with public goods. Since the marginal cost of production is zero, individuals will not be willing to pay for the good because they can consume it without paying. However, the marginal social benefit is greater than the individual's marginal benefit, meaning that society as a whole would benefit if everyone contributed to the provision of the good.

No Individual Is Willing to Pay to Provide the Efficient