When government provides a good with an external benefit,to attain efficiency the price paid by consumers is set equal to the
A) marginal private benefit at the efficient level of output.
B) marginal private cost at the efficient level of output.
C) amount paid by taxpayers.
D) market-determined price.
E) marginal external benefit at the efficient level of output.

Question

Quizplus · Accepted Answer

When a government provides a good with an external benefit, to attain efficiency, the price paid by consumers should be set equal to the marginal private benefit at the efficient level of output. This ensures that the consumption reflects the true value to consumers, incorporating the external benefits into the decision-making process.

When Government Provides a Good with an External Benefit,to Attain