Consider an economy with three consumers, each with a marginal benefit for a public good of MB= 10–q. If the marginal cost of providing the good is $4 per unit, what is the efficient level ofoutput? [Round your answer to 2 decimal places when needed]

Answered: Consider an economy with three…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider an economy with three consumers, each with a marginal benefit for a public good of MB
= 10–q. If the marginal cost of providing the good is $4 per unit, what is the efficient level of
output? [Round your answer to 2 decimal places when needed]

Expert Solution

Step 1: Define efficient level of output

The efficient level of output, with regards to economics, alludes to the quantity of a good or service that is produced or given in a manner that boosts generally speaking societal welfare or utility. It is the level of production at which the marginal benefit of consuming or delivering an extra unit of the good or service is equivalent to the marginal cost of creating it.

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