Refer to the supply and demand graph for a public good.Which one of the following statements is correct?

Question

Quizplus · Accepted Answer

In a public good, the supply is non-rival and non-excludable, meaning that the marginal cost of providing the good to an additional person is zero and anyone can benefit from it without being excluded. Therefore, the supply curve is a vertical line. On the other hand, the demand for a public good reflects the marginal benefit that consumers receive from consuming the good, and it is assumed to be the sum of individual demand curves. The point where the supply and demand curves intersect represents the optimal output level for the public good. Therefore, option A is correct as it correctly describes the roles of the supply and demand curves in a public good market.

Refer to the Supply and Demand Graph for a Public