Use the following to answer question(s): Correcting for Market Failure: A Public Good

-(Exhibit: Correcting for Market Failure: A Public Good) A private market produces R units of output of a public good.If the government intervenes to provide the efficient level of a public good, the net gain will be:
A) KVO
B) TUV
C) RUVW minus RTVW
D) B and C are both correct.

Question

Use the following to answer question(s): Correcting for Market Failure: A Public Good
 
-(Exhibit: Correcting for Market Failure: A Public Good) A private market produces R units of output of a public good.If the government intervenes to provide the efficient level of a public good, the net gain will be:
A) KVO 
B) TUV 
C) RUVW minus RTVW 
D) B and C are both correct.

Quizplus · Accepted Answer

Both B and C correctly describe the net gain from government intervention to provide the efficient level of a public good. TUV represents the additional benefit over cost from increasing production to the efficient level, and RUVW minus RTVW calculates the net gain by considering both the increased benefits and costs associated with moving from R units to the efficient level of production.

Use the Following to Answer Question(s): Correcting for Market Failure