The efficient price to charge consumers for their use of a public good is
A)equal to the average per-person cost of providing this good.
B)equal to the cost of providing the good to one additional consumer.
C)equal to the highest individual marginal benefit from consuming a unit of the good.
D)that price that prevents free riding by some consumers.
E)equal to the price that the free market would achieve.

Question

Quizplus · Accepted Answer

The efficient price for a public good is equal to the marginal cost of providing it to one additional consumer, which is typically zero since public goods are non-rivalrous.

The Efficient Price to Charge Consumers for Their Use of a Public