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.