Public goods should be provided to the point at which the marginal cost of production equals:
A)the maximum price any individual is willing to pay for that unit.
B)the highest marginal benefit from any individual consumer of the good.
C)zero.
D)the sum of the individual marginal benefits from all consumers of that unit.

Question

Quizplus · Accepted Answer

Public goods are characterized by non-excludability and non-rivalry, meaning that one person's consumption does not reduce the availability to others, and it's not feasible to exclude anyone from using the good. The efficient provision of a public good occurs at the point where the marginal cost of producing an additional unit equals the sum of the marginal benefits that all individuals derive from that unit. This ensures that the good is provided in a quantity that maximizes the net benefits to society.

Public Goods Should Be Provided to the Point at Which