There Are Three Consumers of a Public Good; Their Marginal

question 83

Multiple Choice

There are three consumers of a public good; their marginal benefits are given by:
Consumer 1: MB = 400 - Q
Consumer 2: MB = 200 - 2Q
Consumer 3: MB = 600 - Q
Where Q is the quantity of the public good. The marginal cost of the public good is MC = 600 + 296Q. What is the socially optimal quantity?

• A) 6
• B) 2
• C) 3
• D) 1

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