(Figure: Externality Table A) The table shows the information for a public good being provided to two citizens. Based on the table, what is the equilibrium quantity?
$\begin{array}{|r|r|r|r|}
\hline \text { Q } & \text { Ann's MPB } & \text { Ben's MPB } & \text { MSC } \
\hline 1 & \$ 10 & \$ 12 & 6 \
\hline 2 & 8 & 9 & 9 \
\hline 3 & 6 & 6 & 12 \
\hline 4 & 4 & 3 & 15 \
\hline 5 & 2 & 0 & 18 \
\hline 6 & 0 & 0 & 21 \
\hline 7 & 0 & 0 & 24\
\hline
\end{array}$
A) 1
B) 3
C) 5
D) 7

Question

(Figure: Externality Table A) The table shows the information for a public good being provided to two citizens. Based on the table, what is the equilibrium quantity?
 $\begin{array}{|r|r|r|r|}
\hline \text { Q } & \text { Ann's MPB } & \text { Ben's MPB } & \text { MSC } \
\hline 1 & \$ 10 & \$ 12 & 6 \
\hline 2 & 8 & 9 & 9 \
\hline 3 & 6 & 6 & 12 \
\hline 4 & 4 & 3 & 15 \
\hline 5 & 2 & 0 & 18 \
\hline 6 & 0 & 0 & 21 \
\hline 7 & 0 & 0 & 24\
\hline
\end{array}$
A) 1
B) 3
C) 5
D) 7

Quizplus · Accepted Answer

The equilibrium quantity for a public good is determined where the sum of the marginal private benefits (MPB) equals the marginal social cost (MSC). At Q=3, Ann's MPB ($6) + Ben's MPB ($6) = $12, which equals the MSC ($12).

(Figure: Externality Table A) the Table Shows the Information for a Public