If the marginal social benefit of a public good is greater than the marginal social cost of providing the good, then:
A)the private market will best determine who and how much of the good will be provided.
B)a community will provide the good.
C)the community will not provide the good.
D)free riding will not occur, so the private market will provide the socially optimal amount.

Question

Quizplus · Accepted Answer

When the marginal social benefit of a public good is greater than the marginal social cost of providing the good, a community will find it beneficial to provide the good. This is because the benefits of the good exceed the costs, and the community can benefit as a whole from providing it. The private market will not provide the socially optimal amount of the good in this case because of the problem of free riding, where individuals may not contribute to the provision of the good but still benefit from it.

If the Marginal Social Benefit of a Public Good Is