Which of the Following Is TRUE When There Is Optimal

question 45

Multiple Choice

Which of the following is TRUE when there is optimal provision of a public good?

• A) marginal cost equals marginal rate of substitution for each consumer
• B) each consumer's surplus equals marginal cost
• C) total consumer surplus equals marginal cost
• D) the sum of all consumers' marginal rates of substitution equals marginal cost

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Definitions:

Threat of Entry

The risk existing businesses face when new competitors are able to enter the market or industry.

Existing Competitors

Companies that are currently operating in the same market and competing for the same customers.

Industry

A classification that refers to groups of companies that are related based on their primary business activities.

Bargaining Power

The relative ability of parties in a negotiation to exert influence over each other, often determining the terms and conditions of agreements.