The efficient quantity of a public good is provided when the economy's
A) marginal social benefit from the good is greater than its marginal social cost.
B) total benefit from the good equals its total cost.
C) total benefit from the good is less than its total cost.
D) marginal social benefit from the good equals its marginal social cost.

Question

Quizplus · Accepted Answer

The efficient quantity of a public good is provided when the marginal social benefit (MSB) from the good equals its marginal social cost (MSC). This equality ensures that the resources are allocated efficiently, maximizing societal welfare.

The Efficient Quantity of a Public Good Is Provided When