The efficient level of provision of a public good is the level at which its marginal social benefit is equal to the marginal social cost of its production.

Question

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This is because the efficient level of provision ensures that society receives the maximum overall benefit from the public good, where the marginal social benefit (the additional benefit to society from consuming one more unit of the public good) is equal to the marginal social cost (the additional cost to society of producing one more unit of the public good).

The Efficient Level of Provision of a Public Good Is