The marginal cost of producing 40 units of a public good is $200. There are two individuals in the society. Person A is willing to pay $80 for 40 units of the public good. If 40 units of the public good are provided, how much must Person B be willing to pay?
A) $0
B) $80
C) $120
D) $150

Question

Quizplus · Accepted Answer

The total cost of producing 40 units is $200. Person A is willing to pay $80, so Person B must be willing to pay the remaining amount to cover the total cost, which is $200 - $80 = $120.

The Marginal Cost of Producing 40 Units of a Public