Answer the question on the basis of the following information for a public good. Pa and Pb are the prices that individuals A and B are willing to pay for the last unit of a public good, rather than do without it. These people are the only two members of society.
If this good were a private good instead of a public one, the total quantity demanded at a $3 market price would be
Definitions:
Marginal Cost
The hike in overall costs when one extra unit of a product or service is produced.
Economic Profits
The difference between total revenue and total costs, including both explicit and implicit costs, representing surplus remaining after all costs have been paid.
Entry Barriers
Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.
Total Profit
The financial gain obtained by subtracting total expenses from total revenue generated from sales or operations.
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