Asked by Callie Idell on Jul 11, 2024
Verified
At the optimal quantity of a public good,
A) marginal benefit exceeds marginal cost by the greatest amount.
B) total benefit equals total cost.
C) marginal benefit equals marginal cost.
D) marginal benefit is zero.
Optimal Quantity
The amount of a good or service that yields the highest net benefit to producers and consumers, considering costs and benefits.
Marginal Benefit
The surplus happiness or utility experienced from using an extra unit of any good or service.
- Master the concept of the marginal-cost-marginal-benefit rule and apply it to identify the appropriate distribution of public goods.
Verified Answer
RS
Rahela SinanagicJul 18, 2024
Final Answer :
C
Explanation :
At the optimal quantity of a public good, the marginal benefit equals the marginal cost. This principle ensures that resources are allocated efficiently, maximizing societal welfare.
Learning Objectives
- Master the concept of the marginal-cost-marginal-benefit rule and apply it to identify the appropriate distribution of public goods.
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