Consider Three Consumers of a Public Good with the Following

question 78

Essay

Consider three consumers of a public good with the following marginal benefit of consumption:
Consumer 1: MB₁ = 5 - 2Q
Consumer 2: MB₂ = 4 - Q
Consumer 3: MB₃ = 3 - Q
a. If the marginal cost of producing the public good is MC = 8Q, what is the efficient quantity of it?
b. If the marginal cost of producing the public good is constant at $4, what is the efficient quantity of it?