Multiple Choice
-The marginal cost of educating a student is $30,000, and this cost is independent of the number of students. The figure above shows the marginal private benefit that a student receives from education. An independent government agency determines that the efficient number of students is 40,000. What subsidy per student must be given to colleges to make the efficient number of students undertake education?
A) It depends on the demand.
B) $20,000
C) $30,000
D) $10,000
Correct Answer:
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