Refer to the supply and demand graph for a public good.Which line segment would indicate the amount by which the marginal benefit of this public good is greater than the marginal cost?
A)de
B)da
C)ef
D)ab

Question

Refer to the supply and demand graph for a public good.Which line segment would indicate the amount by which the marginal benefit of this public good is greater than the marginal cost? 
A)de 
B)da 
C)ef 
D)ab

Quizplus · Accepted Answer

The line segment da represents the amount by which the marginal benefit of the public good is greater than the marginal cost. This is because it is the distance between the demand curve and the marginal cost curve at the equilibrium quantity of Qm.

Refer to the Supply and Demand Graph for a Public