Title: The diagram below shows the marginal benefit of consuming, and marginal cost of providing, a public ...
Post by: Hareplity on Oct 16, 2022
The diagram below shows the marginal benefit of consuming, and marginal cost of providing, a public good. This economy has 3 individuals, A, B and C. The diagram shows the MB for each individual and a summation of their marginal benefits.
FIGURE 16-4
Refer to Figure 16-4. The curve MBABC is derived by
▸ determining the private marginal cost of the public good.
▸ observation of the consumption of public goods at the optimal price.
▸ observation of the consumption of public goods at a price of zero.
▸ a vertical summation of the marginal benefits of all individuals at each level of output.
▸ a horizontal summation of the marginal benefits of all individuals at each given price level.
Title: The diagram below shows the marginal benefit of consuming, and marginal cost of providing, a public ...
Post by: sz on Oct 16, 2022
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