The supply curve of a public good shows
A)the total quantities that all producers are willing and able to supply at each price.
B)the maximum amount suppliers require to produce each quantity of the good.
C)the total cost of producing each unit of the good.
D)the marginal cost of producing each unit of the good.

Question

Quizplus · Accepted Answer

The supply curve of a public good shows the marginal cost of producing each unit of the good. This is because public goods are non-rival and non-excludable, meaning that the cost of producing each additional unit is the same and that suppliers cannot charge different prices to different consumers. Therefore, the supply curve for a public good is simply a horizontal line at the marginal cost of production.

The Supply Curve of a Public Good Shows