The efficient output of a pure public good is achieved at the point at which:

Question

Quizplus · Accepted Answer

The efficient output of a pure public good is achieved at the point where the sum of the marginal benefits of all consumers equals the marginal social cost of producing the good. This is known as the socially optimal level of provision, and it maximizes the net benefit to society. At this level of provision, the total benefits of the public good are maximized and the costs are minimized, resulting in the most efficient allocation of resources. Choice (A) is incorrect because it only satisfies the condition for one consumer, whereas public goods typically have multiple consumers. Choice (C) and (D) are incorrect because they do not take into account the benefits that are generated by the public good for society as a whole.

The Efficient Output of a Pure Public Good Is Achieved