The marginal benefit curve of a public good is calculated by ________ individual marginal ________ curves.
A) averaging; cost/benefit
B) horizontally summing; cost
C) averaging; benefit
D) vertically summing; benefit
E) horizontally summing; benefit

Question

Quizplus · Accepted Answer

The marginal benefit curve of a public good is obtained by vertically summing the individual demand curves of all consumers in the market. This is because the benefit derived from a public good is non-rivalrous, meaning that the consumption of one individual does not affect the availability of the good for others. Therefore, the marginal benefit to an individual is equal to the total benefit derived from the public good divided by the number of individuals in the market, which is obtained by vertically summing the individual demand curves.

The Marginal Benefit Curve of a Public Good Is Calculated