Pam and Kunal are the only members of a community that is trying to determine how much of the public good should be produced.Suppose that Pam is willing to pay $10 for the fourth unit of the public good,while Kunal is willing to pay $3 for it.What is the community's marginal willingness to pay for the fourth unit of the public good?

Question

Quizplus · Accepted Answer

In a community, the marginal willingness to pay for a public good is the sum of what each member is willing to pay for an additional unit of that good. Therefore, for the fourth unit, it's $10 (Pam) + $3 (Kunal) = $13.

Pam and Kunal Are the Only Members of a Community