Consider a remote village with a limited,freely available water supply and no government intervention in the allocation of water.In this case,each individual has an incentive to use water until their
A)private marginal benefit is zero.
B)private marginal cost is zero.
C)social marginal benefit is maximized.
D)social marginal cost is minimized.
E)private and social marginal costs are equal.

Question

Quizplus · Accepted Answer

Each individual will use water until their private marginal benefit is zero, as they will continue to consume until the benefit they receive from the last unit of water is no longer positive.

Consider a Remote Village with a Limited,freely Available Water Supply