Use the Following to Answer Questions

question 55

Multiple Choice

Use the following to answer questions:
Scenario: Ben and Nick
Ben and Nick are the only members of a community. They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known. In addition, the marginal social cost (MSC) of the public good is known and is constant.
-(Scenario: Ben and Nick) Look at the figure and scenario Ben and Nick. Q₄:

• A) is the socially optimal level of provision of the public good.
• B) is equal to P₄ + P₃ in marginal social benefits.
• C) represents an amount at which the MSB is greater than the MSC.
• D) will not be produced, since neither Ben nor Nick finds any benefit in it at this level.

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Definitions:

Trade Discounts

A reduction in the listed price of a product or service, offered by sellers to buyers in the commercial market.

Sales Tax

A government-imposed tax on the sale of goods and services, which is typically a percentage of the sales price paid by the consumer.

Sales Account

An account in a company's financial records that tracks the revenue generated from goods and services sold.

Sales Discount

A reduction in the price of goods or services offered to customers, usually to encourage prompt payment.