Which of the following represents an efficient quantity of a public good?
A) the quantity at which the marginal cost of production is minimized
B) the quantity at which the number of free riders is maximized
C) the quantity at which the marginal benefit minus marginal cost is minimized
D) the quantity at which the marginal benefit is equal to the marginal cost
E) the quantity at which the marginal benefit exceeds the marginal cost by the maximum amount possible

Question

Quizplus · Accepted Answer

An efficient quantity of a public good is the quantity at which the marginal benefit is equal to the marginal cost. At this point, the society is able to achieve the maximum possible social welfare by allocating resources in the production of the public good. All other options are incorrect as they do not represent an efficiency criterion for public goods.

Which of the Following Represents an Efficient Quantity of a Public