Suppose that the marginal benefit (MB)of national defence is MB = 600 - 10Q,where Q measures units of national defence,for Charlie and MB = 400 - 4Q for Sally.Combining Charlie's and Sally's marginal benefits yields social MB = 1000 - 14Q.If the marginal cost of providing national defence is constant and equal to 664 (measured in the same units as marginal benefit),the efficient level of national defence is

Question

Quizplus · Accepted Answer

To find the efficient level of national defense, we need to set the social marginal benefit equal to the marginal cost and solve for Q:
1000 - 14Q = 664
336 = 14Q
Q = 24
Therefore, the efficient level of national defense is 24 units.

Suppose That the Marginal Benefit (MB)of National Defence Is MB