Esteban, Mariko, and Greta are the only three people in a community. Esteban is willing to pay $20 for the fifth unit of a public good; Mariko, $15; and Greta, $25. Government should produce the fifth unit of the public good if the marginal cost is less than or equal to

Question

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The marginal benefit of producing the fifth unit of a public good is the sum of the willingness to pay of all three individuals (Esteban: $20, Mariko: $15, Greta: $25), which totals $60. The government should produce the fifth unit if the marginal cost is less than or equal to this total marginal benefit of $60.

Esteban, Mariko, and Greta Are the Only Three People in a Community