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The Following Information Is for a Public Good

Question 123

Multiple Choice

The following information is for a public good.Pa and Pb are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it.These people are the only two members of society.Refer to the data below.If the marginal cost of this good at the optimal quantity is $4, the optimal quantity must be: The following information is for a public good.P<sub>a</sub> and P<sub>b</sub> are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it.These people are the only two members of society.Refer to the data below.If the marginal cost of this good at the optimal quantity is $4, the optimal quantity must be: A) 1 unit. B) 2 units. C) 3 units. D) 4 units.


A) 1 unit.
B) 2 units.
C) 3 units.
D) 4 units.

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