If at the quantity determined by private costs and benefits,the marginal social benefit of a public good is greater than the marginal social cost of providing the good:
A)the private market will best determine how much of the good will be provided and to whom.
B)a community would be better off if provision of the good were to increase.
C)the community will not provide the good.
D)free riding will not occur,so the private market will provide the socially optimal amount.

Question

Quizplus · Accepted Answer

If the marginal social benefit of a public good is greater than the marginal social cost of providing the good, then increasing the provision of the good would benefit the community as a whole. This is because the benefits of the public good are not fully captured by private individuals, so the government or other community organizations may need to step in and provide the good to ensure that it is available to everyone. The private market may not be able to provide the socially optimal amount of the good in this case, as free riding may occur and individuals may not be willing to pay the full cost of the good.

If at the Quantity Determined by Private Costs and Benefits,the