For a public good, the marginal social benefit:
A)equals the sum of the individual marginal benefits for all of the consumers of that unit.
B)equals the sum of each consumer's willingness to pay for that unit.
C)is greater than any individual marginal benefit.
D)equals the sum of the individual marginal benefits that are enjoyed by all consumers of that unit or the sum of each consumer's willingness to pay for that unit and is greater than any individual marginal benefit.

Question

Quizplus · Accepted Answer

The marginal social benefit for a public good equals the sum of the individual marginal benefits that are enjoyed by all consumers of that unit or the sum of each consumer's willingness to pay for that unit. This is because a public good is non-excludable and non-rivalrous, meaning that once it is provided, everyone can benefit from it and one person's consumption does not reduce the amount available for others. Therefore, the total benefit to society is the sum of all individual benefits, which exceeds any individual marginal benefit.

For a Public Good, the Marginal Social Benefit