The Efficient Output Level of a Public Good Occurs Where

question 238

Multiple Choice

The efficient output level of a public good occurs where the

• A) greatest number of free riders occurs.
• B) marginal cost of producing the last unit is equal to the marginal benefit realized by consumers.
• C) total cost of production is affordable.
• D) marginal cost of production is at its lowest.

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Definitions:

Elastic Portion

The segment of a demand curve where a change in price leads to a more than proportional change in the quantity demanded, indicating high price sensitivity.

Linear Demand

A type of demand where there is a constant relationship between the quantity demanded and price, represented by a straight line on a graph.

Price Inelastic

A situation in which the demand for a good does not change significantly in response to a change in price, indicating that consumers are less sensitive to price changes.

Linear

A term used to describe something that forms a straight line or a process that proceeds in steps of equal increments.