The economy's demand curve for a public good is obtained by summing the individual
A)marginal cost curves horizontally.
B)marginal cost curves vertically.
C)marginal benefit curves horizontally.
D)marginal benefit curves vertically.
E)benefit curves diagonally.

Question

Quizplus · Accepted Answer

The economy's demand curve for a public good is obtained by summing the marginal benefit curves vertically. This is because the marginal benefit is the additional benefit received from consuming one more unit of the public good, and when summing the individual marginal benefit curves vertically, we can obtain the total benefits derived from each level of consumption of the public good. This will give us the demand curve for the public good, which reflects the willingness of consumers to pay for the public good at each level of consumption.

The Economy's Demand Curve for a Public Good Is Obtained