Katie Bobby

-The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $175 a piece to produce, what is the efficient quantity of submarines?
A) 0
B) 1
C) 2
D) 3

Question

Katie Bobby
 
-The above table shows the marginal benefit from submarines for the only two citizens of a country. Submarines are a public good. If submarines cost $175 a piece to produce, what is the efficient quantity of submarines?
A) 0 
B) 1 
C) 2 
D) 3

Quizplus · Accepted Answer

The efficient quantity of a public good is where the sum of the marginal benefits equals the marginal cost. If the sum of the marginal benefits from the two citizens for 2 submarines is equal to or greater than $175, then 2 is the efficient quantity.

Katie Bobby -The Above Table Shows the Marginal Benefit from Submarines for Benefit