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There Are Four Lighthouses on the Island of Sand

Question 61

Multiple Choice

There are four lighthouses on the island of Sand. If this is the efficient quantity of lighthouses,


A) the marginal social benefit of the fourth lighthouse equals its marginal social cost.
B) marginal social benefit minus marginal social cost is at a maximum.
C) total social benefit is zero.
D) Both answers A and C are correct.

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