(Scenario: Avery and Ethan and the Demand for a Public Good) Use Scenario: Avery and Ethan and the Demand for a Public Good. At all levels of provision of the public good: Scenario: Avery and Ethan and the Demand for a Public Good Avery and Ethan are the only members of a community. They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known. In addition, the marginal social cost (MSC) of the public good is known and is constant. Marginal benefit of public good P₁ P₂ P3 P₁ Q₁ Q₂ Avery's MB Q3 Ethan's MB MSC MSB Q₁ Quantity transcript O the MSC is less than the MSB. O the optimal level is not attained. O the private marginal benefits cannot be determined. O Avery places a higher value on the public good than Ethan.

(Scenario: Avery and Ethan and the Demand for a Public Good) Use Scenario: Avery and Ethan and the Demand for a Public Good. At all levels of provision of the public good: Scenario: Avery and Ethan and the Demand for a Public Good Avery and Ethan are the only members of a community. They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known. In addition, the marginal social cost (MSC) of the public good is known and is constant. Marginal benefit of public good P₁ P₂ P3 P₁ Q₁ Q₂ Avery's MB Q3 Ethan's MB MSC MSB Q₁ Quantity transcript O the MSC is less than the MSB. O the optimal level is not attained. O the private marginal benefits cannot be determined. O Avery places a higher value on the public good than Ethan.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 24P: Assume that the marginal private costs of a film producing fuel-efficient can; is greater than the...

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