Lindahl pricing is not necessary for economic efficiency.

Question

Quizplus · Accepted Answer

Lindahl pricing is necessary for economic efficiency because it ensures that the cost of a public good is divided among consumers in proportion to the marginal benefits they receive from it. This incentivizes consumers to reveal their true willingness to pay for the good and enables the efficient allocation of resources. Without Lindahl pricing, there may be overconsumption or underconsumption of the public good, leading to inefficiency.

Lindahl Pricing Is Not Necessary for Economic Efficiency