Answer This Question Based on the Following Information for a Public

question 202

Multiple Choice

Answer this question based on the following information for a public good. Pₐ and Pᵦ represent the prices that citizens (a) and (b) , the only two people in this nation, are willing to pay for additional units of a quantity (Q_c ) of the public good. Qₛrepresents the quantity of the public good supplied by government at each of the collective prices. In equilibrium, the marginal benefit and cost of the public good will be

• A)$7.
• B)$6.
• C)$5.
• D)$3.

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Definitions:

Capital Stock

The total amount of stock, both common and preferred, that a company is authorized to issue according to its corporate charter.

Privately Held Corporation

A corporation that has only a few stockholders and whose stock is not available for sale to the general public.

Retained Earnings

The portion of a company's net income that is not distributed as dividends to shareholders but retained for reinvestment in the business or to pay off debt.

Paid-In Capital

The amount of money that a company receives from shareholders in exchange for shares of stock, exceeding the par value of the shares.