14 of 28 concepts completed multiple choice question as seen in the graph, the optimal quantity of a public…
14 of 28 concepts completed multiple choice question as seen in the graph, the optimal quantity of a public good will be where marginal benefit equals marginal cost where marginal benefit is less than marginal cost, and the marginal benefit curve is below the marginal cost curve where marginal benefit is greater than marginal cost, and the marginal benefit curve is higher than the marginal cost curve
Answer
Brief Explanations:
In economics, the optimal quantity of a public - good is determined at the point where the marginal benefit (the additional benefit from consuming one more unit) equals the marginal cost (the additional cost of producing one more unit). When marginal benefit is less than marginal cost, it is not efficient to produce more as it will lead to a net loss. When marginal benefit is greater than marginal cost, more units should be produced to increase overall welfare until the two are equal.
Answer:
where marginal benefit equals marginal cost