Figure: an Individual's Marginal Benefit from a Public Good

question 88

Multiple Choice

Figure: An Individual's Marginal Benefit from a Public Good
(Figure: An Individual's Marginal Benefit from a Public Good) Look at the figure An Individual's Marginal Benefit from a Public Good.Assume that two individuals will share consumption of a public good; each individual has the same marginal benefit curve as the one shown in the figure.If the marginal cost of the good is $24, what is the level of this public good that would maximize society's welfare?

• A)0 units
• B)8 units
• C)12 units
• D)16 units

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Definitions:

Total Cost

The aggregate sum of all expenses associated with producing a good or providing a service, including fixed and variable costs.

Variable Costs

Expenses that vary directly with the level of production or sales volume.

Production

Use of resources, such as people and machinery, to convert materials into finished goods and services.

Inflexible

Lacking the ability to adapt or change according to different situations, conditions, or demands; rigid in approach or structure.