We determine the economy's marginal benefit curve for a public good or service by
A) vertically summing the individual marginal benefit curves of each member of society.
B) horizontally summing the individual marginal benefits curves of each member of society.
C) multiplying the marginal benefits of each member of society.
D) dividing the sum of the marginal benefits of each member of society by the number of people in society.
E) vertically summing the individual firm's marginal cost curves.

Question

Quizplus · Accepted Answer

The marginal benefit curve for a public good or service is determined by vertically summing the individual marginal benefit curves of each member of society because the benefits of a public good are non-excludable and non-rivalrous. This means that everyone can benefit from the public good regardless of whether they pay for it or not, and one person's consumption of the good does not detract from another person's ability to consume it. Therefore, the marginal benefit for each individual is the same as the marginal benefit for society as a whole, and the total marginal benefit can be obtained by summing the individual marginal benefits.

We Determine the Economy's Marginal Benefit Curve for a Public