Since collective consumption goods have a marginal cost of zero,the efficient price is equal to _____.

Question

Quizplus · Accepted Answer

The efficient price for collective consumption goods is equal to the marginal cost because offering these goods to one more individual does not result in any additional cost. Therefore, the pricing strategy should focus on marginal cost to ensure efficiency. Average fixed cost and average variable cost are not relevant for pricing since they are not related to the incremental cost of production. The market price may not reflect the actual cost of production and may result in inefficiencies.

Since Collective Consumption Goods Have a Marginal Cost of Zero,the