Scenario: Avery and Ethan and the Demand for a Public Good) UseScenario: Avery and Ethan and the Demand for a Public Good.At Q2 in the figure, the marginalsocial benefit from the last unit of the public good is:
Avery and Ethan are the only members of a community. They haverevealed the marginal private benefits they each receive from apublic good whose marginal social benefit is known. In addition,the marginal social cost (MSC) of the public good is knownand is constant.
Scenario Avery And Ethan And The Demand For A Public Good Use Scenario Avery And Ethan And The Demand For A Public Go 1 (18.22 KiB) Viewed 36 times
equal to the marginal social cost.
zero for Ethan.
equalto P4 + P3.
the optimal level of provision of the public good.
Marginal benefit of public good P₁ P₂ P3 P₁ Q₁₂ Q₂ Avery's MB Ethan's MB Q3 Q4 Q₁ MSC MSB Quantity
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