Public Goods Should Be Provided to the Point at Which

question 131

Multiple Choice

Public goods should be provided to the point at which the marginal cost of production equals:

• A)the maximum price any individual is willing to pay for that unit.
• B)the highest marginal benefit from any individual consumer of the good.
• C)zero.
• D)the sum of the individual marginal benefits from all consumers of that unit.

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Definitions:

Excessive Bids

Bidding amounts that significantly exceed the estimated value of an item in auctions or tender processes.

Dominant Strategies

In game theory, strategies that are best for a player regardless of what the other players choose.

Credible Threat

A statement or action that is believable and carries the weight of possible enforcement, often used in negotiations or strategic situations.

Economies of Scale

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.