To Determine the Efficient Quantity of a Public Good to Supply

question 118

Multiple Choice

To determine the efficient quantity of a public good to supply,

• A) the private firms that will produce the good each produce the exact same quantity.
• B) marginal benefit and marginal cost are equated, the same as is done to determine the efficient quantity of a private good.
• C) total benefit is equated to total cost, the same as is done to determine the efficient quantity of a private good.
• D) politicians use the principle of maximum differentiation.
• E) marginal benefit must exceed marginal cost by as much as possible.

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