The efficient quantity of a public good is the quantity at which marginal benefit is
A) greater than marginal cost by any amount.
B) less than marginal cost.
C) equal to marginal cost.
D) zero.
E) greater than marginal cost by the maximum amount.

Question

Quizplus · Accepted Answer

The efficient quantity of a public good is the quantity at which marginal benefit is equal to marginal cost. This ensures the maximum overall benefit to society. Option A, B, D and E are not efficient quantities as they do not result in the maximum overall benefit to society.

The Efficient Quantity of a Public Good Is the Quantity